STATE OF NEW YORK
________________________________________________________________________
8373--A
2011-2012 Regular Sessions
IN ASSEMBLY
June 15, 2011
___________
Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
tee on Consumer Affairs and Protection -- reported and referred to the
Committee on Codes -- recommitted to the Committee on Codes in accord-
ance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the general business law, in relation to enacting the
discount buying club consumer protection act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new article
2 30-B to read as follows:
3 ARTICLE 30-B
4 DISCOUNT BUYING CLUB CONSUMER PROTECTION ACT
5 Section 641. Short title.
6 641-a. Definitions.
7 641-b. Buyer's or other obligor's right to cancel.
8 641-c. Form of notice; statement of buyer's rights.
9 641-d. Enforcement; penalties.
10 § 641. Short title. This article shall be known and may be cited as
11 the "discount buying club consumer protection act".
12 § 641-a. Definitions. As used in this article, the following terms
13 shall mean:
14 1. "Business day" means any calendar day except Sunday or any legal
15 holiday.
16 2. "Buyer" as used in this article means any individual who enters
17 into an agreement for services with a discount buying club.
18 3. "Discount buying club" means any person, firm or corporation,
19 which, in exchange for valuable consideration, offers to sell or to
20 arrange the sale of goods or services to its customers at prices repres-
21 ented to be lower than are generally available. Such term shall not
22 include:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09185-06-2
A. 8373--A 2
1 a. any cooperative buying association or other group in which no
2 person is intended to profit or actually profits beyond the benefit that
3 all members receive from buying at a discount;
4 b. any person, firm or corporation that:
5 (i) for fifty dollars or less sells tickets or coupons valid for use
6 in obtaining goods or services from a retail merchant; or
7 (ii) as a service collateral to its principal business, and for no
8 additional charge, arranges for its members or customers to purchase or
9 lease directly from particular merchants at a specified discount; or
10 (iii) charges an advance fee for access to service, or member bene-
11 fits, and allows the buyer to terminate membership by notifying the
12 person, firm or corporation of intent to terminate membership without
13 further obligation to make additional payments.
14 4. "Seller" shall mean any person, partnership, corporation or associ-
15 ation engaged in the sale of discount buying club services.
16 § 641-b. Buyer's or other obligor's right to cancel. 1. In addition to
17 any right otherwise to revoke an offer, the buyer may cancel a discount
18 buying club agreement until midnight of the third business day after the
19 day on which the buyer has signed the agreement. Such agreement shall
20 impose no liability on the buyer for such cancellation. The seller shall
21 provide a refund of any fee paid by the buyer not more than ten days
22 after such cancellation.
23 2. Cancellation occurs when written notice of cancellation is given to
24 the seller.
25 3. Notice of cancellation, if given by mail, shall be deemed given
26 when deposited in a mailbox properly addressed and postage prepaid.
27 § 641-c. Form of notice; statement of buyer's rights. 1. In a discount
28 buying club service sale, the seller shall furnish to the buyer:
29 (a) a fully completed receipt or copy of any agreement pertaining to
30 such sale at the time of its execution, which is in the same language,
31 e.g. Spanish, as that principally used in the oral sales presentation
32 and which shows the date of the transaction and contains the name and
33 address of the seller, and in immediate proximity to the space reserved
34 in the agreement for the signature of the buyer and in not less than
35 twelve-point bold face type, a statement in substantially the following
36 form:
37 "YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO
38 MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION.
39 SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS
40 RIGHT."; and
41 (b) at the time the buyer signs the discount buying club agreement, a
42 completed form in duplicate, captioned "NOTICE OF CANCELLATION", which
43 shall be attached to the agreement and easily detachable, and which
44 shall contain in not less than twelve-point bold face type the following
45 information and statements in the same language, e.g. Spanish, as that
46 used in the agreement:
47 NOTICE OF CANCELLATION
48 (enter date of transaction) _________________________________________
49 (Date)
50 YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION,
51 WITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE.
52 IF YOU CANCEL, ANY PAYMENTS MADE BY YOU UNDER THE AGREEMENT AND ANY
53 NEGOTIABLE INSTRUMENT EXECUTED BY YOU WILL BE RETURNED WITHIN TEN BUSI-
54 NESS DAYS FOLLOWING RECEIPT BY THE SELLER OF YOUR CANCELLATION NOTICE,
55 AND ANY SECURITY INTEREST ARISING OUT OF THE TRANSACTION WILL BE
A. 8373--A 3
1 CANCELLED. TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND
2 DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE TO
3 (Name of Seller), AT (Address of Seller)
4 __________________
5 _________________________________
6 (Place of Business) NOT LATER THAN MIDNIGHT OF
7 ____________________________________ (Date)
8 I HEREBY CANCEL THIS TRANSACTION.
9 _________________ (Date)
10 ______________________________ (Buyer's Signature)
11 The seller shall complete both copies by entering the name of the sell-
12 er, the address of the seller's place of business, the date of the tran-
13 saction, and the date, not earlier than the third business day following
14 the date of the transaction, by which the buyer may give notice of
15 cancellation.
16 2. The seller shall inform each buyer orally at the time he or she
17 signs the agreement of his or her right to cancel.
18 3. A discount buying club agreement or receipt shall not include any
19 confession of judgment or any waiver of any of the rights to which the
20 buyer is entitled under this article including specifically his or her
21 right to cancel the sale in accordance with the provisions of this arti-
22 cle.
23 4. No seller, or any agent or employee thereof, shall directly or
24 indirectly represent in any manner during a sales presentation that a
25 consumer must sign an agreement on the same day as such presentation in
26 order to avoid a lifetime prohibition on purchasing discount buying club
27 services from such seller.
28 § 641-d. Enforcement; penalties. 1. Whenever there shall be a
29 violation of the provisions of this article, an application may be made
30 by the attorney general in the name of the people of the state of New
31 York to a court or justice having jurisdiction by a special proceeding
32 to issue an injunction, and upon notice to the defendant of not less
33 than five days, to enjoin and restrain the continuance of such
34 violations; and if it shall appear to the satisfaction of the court or
35 justice that the defendant has, in fact, violated this article, an
36 injunction may be issued by such court or justice, enjoining and
37 restraining any further violation, without requiring proof that any
38 person has, in fact, been injured or damaged thereby. In any such
39 proceeding, the court may make allowances to the attorney general as
40 provided in paragraph six of subdivision (a) of section eighty-three
41 hundred three of the civil practice law and rules, and direct restitu-
42 tion. Whenever the court shall determine that a violation of this arti-
43 cle has occurred, the court may impose a civil penalty of not more than
44 one thousand dollars for each violation. In connection with any such
45 proposed application, the attorney general is authorized to take proof
46 and make a determination of the relevant facts and to issue subpoenas in
47 accordance with the civil practice law and rules.
48 2. Nothing in this section shall in any way limit rights or remedies
49 which are otherwise available under law to the attorney general.
50 § 2. If any provision of article 30-B of the general business law, as
51 added by section one of this act, or the application of such provision
52 in certain circumstances shall be held invalid, the validity of the
53 remainder of such article and its applicability to other circumstances
54 shall not be affected.
55 § 3. This act shall take effect on the first of January next succeed-
56 ing the date upon which it shall have become a law.
