Bill Text: NY A03173 | 2019-2020 | General Assembly | Amended
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-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 3173--A 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 -- 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; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD01191-05-9A. 3173--A 2 1 b. the description of the cancellation policy that applies to the 2 offer; 3 c. the recurring charges that will be charged to the consumer's credit 4 or debit card or payment account with a third party as part of the auto- 5 matic renewal plan or arrangement, and that the amount of the charge may 6 change, if that is the case, and the amount to which the charge will 7 change, if known; 8 d. the length of the automatic renewal term or that the service is 9 continuous, unless the length of the term is chosen by the consumer; and 10 e. the minimum purchase obligation, if any. 11 3. "Clear and conspicuous" means in larger type than the surrounding 12 text, or in contrasting type, font, or color to the surrounding text of 13 the same size, or set off from the surrounding text of the same size by 14 symbols or other marks, in a manner that clearly calls attention to the 15 language. In the case of an audio disclosure, "clear and conspicuous" 16 means in a volume and cadence sufficient to be readily audible and 17 understandable. 18 4. "Consumer" means any individual who seeks or acquires, by purchase 19 or lease, any goods, services, money, or credit for personal, family, or 20 household purposes. 21 5. "Continuous service" means a plan or arrangement in which a 22 subscription or purchasing agreement continues until the consumer 23 cancels the service. 24 § 527-a. Unlawful practices. 1. It shall be unlawful for any business 25 making an automatic renewal or continuous service offer to a consumer in 26 this state to do any of the following: 27 a. fail to present the automatic renewal offer terms or continuous 28 service offer terms in a clear and conspicuous manner before the 29 subscription or purchasing agreement is fulfilled and in visual proximi- 30 ty, or in the case of an offer conveyed by voice, in temporal proximity, 31 to the request for consent to the offer. If the offer also includes a 32 free gift or trial, the offer shall include a clear and conspicuous 33 explanation of the price that will be charged after the trial ends or 34 the manner in which the subscription or purchasing agreement pricing 35 will change upon conclusion of the trial; 36 b. charge the consumer's credit or debit card or the consumer's 37 account with a third party for an automatic renewal or continuous 38 service without first obtaining the consumer's affirmative consent to 39 the agreement containing the automatic renewal offer terms or continuous 40 service offer terms, including the terms of an automatic renewal offer 41 or continuous service offer that is made at a promotional or discounted 42 price for a limited period of time; or 43 c. fail to provide an acknowledgment that includes the automatic 44 renewal or continuous service offer terms, cancellation policy, and 45 information regarding how to cancel in a manner that is capable of being 46 retained by the consumer. If the offer includes a free gift or trial, 47 the business shall also disclose in the acknowledgment how to cancel and 48 allow the consumer to cancel before the consumer pays for the goods or 49 services. 50 2. A business that makes an automatic renewal offer or continuous 51 service offer shall provide a toll-free telephone number, electronic 52 mail address, a postal address only when the seller directly bills the 53 consumer, or another cost-effective, timely, and easy-to-use mechanism 54 for cancellation that shall be described in the acknowledgment specified 55 in paragraph c of subdivision one of this section.A. 3173--A 3 1 3. In addition to the requirements of subdivision two of this section, 2 a consumer who accepts an automatic renewal or continuous service offer 3 online shall be allowed to terminate the automatic renewal or continuous 4 service exclusively online, which may include a termination email 5 formatted and provided by the business that a consumer can send to the 6 business without additional information. 7 4. In the case of a material change in the terms of the automatic 8 renewal or continuous service offer that has been accepted by a consumer 9 in this state, the business shall provide the consumer with a clear and 10 conspicuous notice of the material change and provide information 11 regarding how to cancel in a manner that is capable of being retained by 12 the consumer. 13 5. The requirements of this article shall apply only prior to the 14 completion of the initial order for the automatic renewal or continuous 15 service, except as follows: 16 a. The requirement in paragraph c of subdivision one of this section 17 may be fulfilled after completion of the initial order. 18 b. The requirement in subdivision four of this section shall be 19 fulfilled prior to implementation of the material change. 20 6. In any case in which a business sends any goods, wares, merchan- 21 dise, or products to a consumer, under a continuous service agreement or 22 automatic renewal of a purchase, without first obtaining the consumer's 23 affirmative consent, the goods, wares, merchandise, or products shall 24 for all purposes be deemed an unconditional gift to the consumer, who 25 may use or dispose of the same in any manner he or she sees fit without 26 any obligation whatsoever on the consumer's part to the business, 27 including, but not limited to, bearing the cost of, or responsibility 28 for, shipping any goods, wares, merchandise, or products to the busi- 29 ness. 30 7. Whenever there shall be a violation of this section, an application 31 may be made by the attorney general in the name of the people of the 32 state of New York to a court or justice having jurisdiction to issue an 33 injunction, and upon notice to the defendant of not less than five days, 34 to enjoin and restrain the continuance of such violations; and if it 35 shall appear to the satisfaction of the court or justice that the 36 defendant has in fact, violated this section, an injunction may be 37 issued by such court or justice, enjoining and restraining any further 38 violation, without requiring proof that any person has, in fact, been 39 injured or damaged thereby. In any such proceeding the court may make 40 allowances to the attorney general as provided in section eighty-three 41 hundred three of the civil practice law and rules, and direct restitu- 42 tion. In connection with any such proposed application, the attorney 43 general is authorized to take proof and make a determination of the 44 relevant facts and to issue subpoenas in accordance with the civil prac- 45 tice law and rules. Whenever the court shall determine that a violation 46 of this section has occurred, the court may impose a civil penalty of 47 not more than one hundred dollars for a single violation and not more 48 than five hundred dollars for multiple violations resulting from a 49 single act or incident. A knowing violation of this section shall be 50 punishable by a civil penalty of not more than five hundred dollars for 51 a single violation and not more than one thousand dollars for multiple 52 violations resulting from a single act or incident. No business shall be 53 deemed to have violated the provisions of this section if such business 54 shows, by a preponderance of the evidence, that the violation was not 55 intentional and resulted from a bona fide error made notwithstanding the 56 maintenance of procedures reasonably adopted to avoid such error.A. 3173--A 4 1 8. The following are exempt from the requirements of this article: 2 a. any service provided by a business or its affiliate where either 3 the business or its affiliate is doing business pursuant to a franchise 4 issued by a political subdivision of the state; 5 b. any entity regulated by the department of financial services; 6 c. security system alarm operators; 7 d. banks, bank holding companies, or the subsidiary or affiliate of 8 either, or credit unions or other financial institutions, licensed under 9 state or federal law; and 10 e. sellers and administrators of a service contract, as defined pursu- 11 ant to section seven thousand nine hundred two of the insurance law. 12 § 3. This act shall take effect on the ninetieth day after it shall 13 have become a law.
