Bill Text: NY A03173 | 2019-2020 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Prohibits certain practices by businesses making an automatic renewal or continuous service offer to consumers in the state; provides exemptions.
Spectrum: Partisan Bill (Democrat 15-0)
Status: (Passed) 2020-11-11 - SIGNED CHAP.267 [A03173 Detail]
Download: New_York-2019-A03173-Introduced.html
Bill Title: Prohibits certain practices by businesses making an automatic renewal or continuous service offer to consumers in the state; provides exemptions.
Spectrum: Partisan Bill (Democrat 15-0)
Status: (Passed) 2020-11-11 - SIGNED CHAP.267 [A03173 Detail]
Download: New_York-2019-A03173-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3173 2019-2020 Regular Sessions IN ASSEMBLY January 28, 2019 ___________ Introduced by M. of A. DINOWITZ, GOTTFRIED, ARROYO, STIRPE, GALEF, JOYNER, PICHARDO, ABINANTI, FAHY, SEAWRIGHT -- Multi-Sponsored by -- M. of A. BRAUNSTEIN, COOK, GLICK, RIVERA -- read once and referred to the Committee on Consumer Affairs and Protection 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. LBD01191-01-9A. 3173 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'sA. 3173 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.