S00040 Summary:

BILL NOS00040A
 
SAME ASSAME AS A02135-A
 
SPONSORHOYLMAN
 
COSPNSR
 
MLTSPNSR
 
Add Art 29-BB SS527 & 527-a, Gen Bus L
 
Prohibits certain practices by businesses making an automatic renewal or continuous service offer to consumers in the state; provides exemptions.
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S00040 Actions:

BILL NOS00040A
 
01/07/2015REFERRED TO CONSUMER PROTECTION
04/27/2015AMEND AND RECOMMIT TO CONSUMER PROTECTION
04/27/2015PRINT NUMBER 40A
01/06/2016REFERRED TO CONSUMER PROTECTION
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S00040 Committee Votes:

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S00040 Floor Votes:

There are no votes for this bill in this legislative session.
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S00040 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          40--A
 
                               2015-2016 Regular Sessions
 
                    IN SENATE
 
                                       (Prefiled)
 
                                     January 7, 2015
                                       ___________
 
        Introduced  by  Sen. HOYLMAN -- read twice and ordered printed, and when
          printed to be committed to the Committee  on  Consumer  Protection  --
          committee  discharged,  bill amended, ordered reprinted as amended and
          recommitted to said committee
 
        AN ACT to amend the general business law,  in  relation  to  prohibiting
          certain practices by businesses making an automatic renewal or contin-
          uous service offer to consumers in the state
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Legislative intent. It is the intent of the legislature  to
     2  end  the  practice of ongoing charging of consumer credit or debit cards
     3  or third party payment accounts without the consumers' explicit  consent
     4  for ongoing shipments of a product or ongoing deliveries of service.
     5    § 2. The general business law is amended by adding a new article 29-BB
     6  to read as follows:
     7                                ARTICLE 29-BB
     8                     PROHIBITED SERVICE OFFER PRACTICES
     9  Section 527. Definitions.
    10          527-a. Unlawful practices.
    11    §  527.  Definitions.  For the purposes of this article, the following
    12  definitions shall apply:
    13    1. "Automatic renewal" means a plan or arrangement  in  which  a  paid
    14  subscription or purchasing agreement is automatically renewed at the end
    15  of a definite term for a subsequent term.
    16    2.  "Automatic  renewal  offer  terms"  means  the following clear and
    17  conspicuous disclosures:
    18    a. that the subscription or purchasing agreement will  continue  until
    19  the consumer cancels;
    20    b.  the  description  of  the  cancellation policy that applies to the
    21  offer;
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01511-03-5

        S. 40--A                            2
 
     1    c. the recurring charges that will be charged to the consumer's credit
     2  or debit card or payment account with a third party as part of the auto-
     3  matic renewal plan or arrangement, and that the amount of the charge may
     4  change, if that is the case, and the amount to  which  the  charge  will
     5  change, if known;
     6    d.  the  length  of  the automatic renewal term or that the service is
     7  continuous, unless the length of the term is chosen by the consumer; and
     8    e. the minimum purchase obligation, if any.
     9    3. "Consumer" means any individual who seeks or acquires, by  purchase
    10  or lease, any goods, services, money, or credit for personal, family, or
    11  household purposes.
    12    4.  "Continuous  service"  means  a  plan  or  arrangement  in which a
    13  subscription  or  purchasing  agreement  continues  until  the  consumer
    14  cancels the service.
    15    §  527-a. Unlawful practices. 1. It shall be unlawful for any business
    16  making an automatic renewal or continuous service offer to a consumer in
    17  this state to do any of the following:
    18    a. fail to present the automatic renewal  offer  terms  or  continuous
    19  service  offer  terms  in  a  clear  and  conspicuous  manner before the
    20  subscription or purchasing agreement is fulfilled and in visual proximi-
    21  ty, or in the case of an offer conveyed by voice, in temporal proximity,
    22  to the request for consent to the offer;
    23    b. charge the consumer's  credit  or  debit  card  or  the  consumer's
    24  account  with  a  third  party  for  an  automatic renewal or continuous
    25  service without first obtaining the consumer's  affirmative  consent  to
    26  the agreement containing the automatic renewal offer terms or continuous
    27  service offer terms; or
    28    c.  fail  to  provide  an  acknowledgment  that includes the automatic
    29  renewal or continuous service  offer  terms,  cancellation  policy,  and
    30  information regarding how to cancel in a manner that is capable of being
    31  retained  by the consumer. If the offer includes a free trial, the busi-
    32  ness shall also disclose in the acknowledgment how to cancel  and  allow
    33  the  consumer  to  cancel  before  the  consumer  pays  for the goods or
    34  services.
    35    2. A business making automatic renewal or  continuous  service  offers
    36  shall  provide  a toll-free telephone number, electronic mail address, a
    37  postal address only when the seller  directly  bills  the  consumer,  or
    38  another  cost-effective, timely, and easy-to-use mechanism for cancella-
    39  tion that shall be described in the acknowledgment  specified  in  para-
    40  graph c of subdivision one of this section.
    41    3.  In  the  case  of  a material change in the terms of the automatic
    42  renewal or continuous service offer that has been accepted by a consumer
    43  in this state, the business shall provide the consumer with a clear  and
    44  conspicuous  notice  of  the  material  change  and  provide information
    45  regarding how to cancel in a manner that is capable of being retained by
    46  the consumer.
    47    4. The requirements of this article shall  apply  only  prior  to  the
    48  completion  of the initial order for the automatic renewal or continuous
    49  service, except as follows:
    50    a. The requirement in paragraph c of subdivision one of  this  section
    51  may be fulfilled after completion of the initial order.
    52    b.  The  requirement  in  subdivision  three  of this section shall be
    53  fulfilled prior to implementation of the material change.
    54    5. In any case in which a business sends any  goods,  wares,  merchan-
    55  dise, or products to a consumer, under a continuous service agreement or
    56  automatic  renewal of a purchase, without first obtaining the consumer's

        S. 40--A                            3
 
     1  affirmative consent, the goods, wares, merchandise,  or  products  shall
     2  for  all  purposes  be deemed an unconditional gift to the consumer, who
     3  may use or dispose of the same in any manner he or she sees fit  without
     4  any  obligation  whatsoever  on  the  consumer's  part  to the business,
     5  including, but not limited to, bearing the cost  of,  or  responsibility
     6  for,  shipping  any  goods, wares, merchandise, or products to the busi-
     7  ness.
     8    6. Whenever there shall be a violation of this section, an application
     9  may be made by the attorney general in the name of  the  people  of  the
    10  state  of New York to a court or justice having jurisdiction to issue an
    11  injunction, and upon notice to the defendant of not less than five days,
    12  to enjoin and restrain the continuance of such  violations;  and  if  it
    13  shall  appear  to  the  satisfaction  of  the  court or justice that the
    14  defendant has in fact, violated  this  section,  an  injunction  may  be
    15  issued  by  such court or justice, enjoining and restraining any further
    16  violation, without requiring proof that any person has,  in  fact,  been
    17  injured  or  damaged thereby.  In any such proceeding the court may make
    18  allowances to the attorney general as provided in  section  eighty-three
    19  hundred  three  of the civil practice law and rules, and direct restitu-
    20  tion. In connection with any such  proposed  application,  the  attorney
    21  general  is  authorized  to  take  proof and make a determination of the
    22  relevant facts and to issue subpoenas in accordance with the civil prac-
    23  tice law and rules.  Whenever the court shall determine that a violation
    24  of this section has occurred, the court may impose a  civil  penalty  of
    25  not  more  than  one hundred dollars for a single violation and not more
    26  than five hundred dollars  for  multiple  violations  resulting  from  a
    27  single  act  or  incident.  A knowing violation of this section shall be
    28  punishable by a civil penalty of not more than five hundred dollars  for
    29  a  single  violation and not more than one thousand dollars for multiple
    30  violations resulting from a single act or incident. No business shall be
    31  deemed to have violated the provisions of this section if such  business
    32  shows,  by  a  preponderance of the evidence, that the violation was not
    33  intentional and resulted from a bona fide error made notwithstanding the
    34  maintenance of procedures reasonably adopted to avoid such error.
    35    7. The following are exempt from the requirements of this article:
    36    a. any service provided by a business or its  affiliate  where  either
    37  the  business or its affiliate is doing business pursuant to a franchise
    38  issued by a political subdivision of the state;
    39    b. any entity regulated by the department of financial services;
    40    c. security system alarm operators;
    41    d. banks, bank holding companies, or the subsidiary  or  affiliate  of
    42  either, or credit unions or other financial institutions, licensed under
    43  state or federal law; and
    44    e. service contract sellers and service contract administrators.
    45    §  3.  This  act shall take effect on the ninetieth day after it shall
    46  have become a law.
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