Bill Text: NY S00265 | 2017-2018 | General Assembly | Introduced
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 1-0)
Status: (Introduced - Dead) 2018-01-03 - REFERRED TO CONSUMER PROTECTION [S00265 Detail]
Download: New_York-2017-S00265-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 265 2017-2018 Regular Sessions IN SENATE (Prefiled) January 4, 2017 ___________ Introduced by Sen. HOYLMAN -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer 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; 22 c. the recurring charges that will be charged to the consumer's credit 23 or debit card or payment account with a third party as part of the auto- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03600-01-7S. 265 2 1 matic renewal plan or arrangement, and that the amount of the charge may 2 change, if that is the case, and the amount to which the charge will 3 change, if known; 4 d. the length of the automatic renewal term or that the service is 5 continuous, unless the length of the term is chosen by the consumer; and 6 e. the minimum purchase obligation, if any. 7 3. "Consumer" means any individual who seeks or acquires, by purchase 8 or lease, any goods, services, money, or credit for personal, family, or 9 household purposes. 10 4. "Continuous service" means a plan or arrangement in which a 11 subscription or purchasing agreement continues until the consumer 12 cancels the service. 13 § 527-a. Unlawful practices. 1. It shall be unlawful for any business 14 making an automatic renewal or continuous service offer to a consumer in 15 this state to do any of the following: 16 a. fail to present the automatic renewal offer terms or continuous 17 service offer terms in a clear and conspicuous manner before the 18 subscription or purchasing agreement is fulfilled and in visual proximi- 19 ty, or in the case of an offer conveyed by voice, in temporal proximity, 20 to the request for consent to the offer; 21 b. charge the consumer's credit or debit card or the consumer's 22 account with a third party for an automatic renewal or continuous 23 service without first obtaining the consumer's affirmative consent to 24 the agreement containing the automatic renewal offer terms or continuous 25 service offer terms; or 26 c. fail to provide an acknowledgment that includes the automatic 27 renewal or continuous service offer terms, cancellation policy, and 28 information regarding how to cancel in a manner that is capable of being 29 retained by the consumer. If the offer includes a free trial, the busi- 30 ness shall also disclose in the acknowledgment how to cancel and allow 31 the consumer to cancel before the consumer pays for the goods or 32 services. 33 2. A business making automatic renewal or continuous service offers 34 shall provide a toll-free telephone number, electronic mail address, a 35 postal address only when the seller directly bills the consumer, or 36 another cost-effective, timely, and easy-to-use mechanism for cancella- 37 tion that shall be described in the acknowledgment specified in para- 38 graph c of subdivision one of this section. 39 3. In the case of a material change in the terms of the automatic 40 renewal or continuous service offer that has been accepted by a consumer 41 in this state, the business shall provide the consumer with a clear and 42 conspicuous notice of the material change and provide information 43 regarding how to cancel in a manner that is capable of being retained by 44 the consumer. 45 4. The requirements of this article shall apply only prior to the 46 completion of the initial order for the automatic renewal or continuous 47 service, except as follows: 48 a. The requirement in paragraph c of subdivision one of this section 49 may be fulfilled after completion of the initial order. 50 b. The requirement in subdivision three of this section shall be 51 fulfilled prior to implementation of the material change. 52 5. In any case in which a business sends any goods, wares, merchan- 53 dise, or products to a consumer, under a continuous service agreement or 54 automatic renewal of a purchase, without first obtaining the consumer's 55 affirmative consent, the goods, wares, merchandise, or products shall 56 for all purposes be deemed an unconditional gift to the consumer, whoS. 265 3 1 may use or dispose of the same in any manner he or she sees fit without 2 any obligation whatsoever on the consumer's part to the business, 3 including, but not limited to, bearing the cost of, or responsibility 4 for, shipping any goods, wares, merchandise, or products to the busi- 5 ness. 6 6. Whenever there shall be a violation of this section, an application 7 may be made by the attorney general in the name of the people of the 8 state of New York to a court or justice having jurisdiction to issue an 9 injunction, and upon notice to the defendant of not less than five days, 10 to enjoin and restrain the continuance of such violations; and if it 11 shall appear to the satisfaction of the court or justice that the 12 defendant has in fact, violated this section, an injunction may be 13 issued by such court or justice, enjoining and restraining any further 14 violation, without requiring proof that any person has, in fact, been 15 injured or damaged thereby. In any such proceeding the court may make 16 allowances to the attorney general as provided in section eighty-three 17 hundred three of the civil practice law and rules, and direct restitu- 18 tion. In connection with any such proposed application, the attorney 19 general is authorized to take proof and make a determination of the 20 relevant facts and to issue subpoenas in accordance with the civil prac- 21 tice law and rules. Whenever the court shall determine that a violation 22 of this section has occurred, the court may impose a civil penalty of 23 not more than one hundred dollars for a single violation and not more 24 than five hundred dollars for multiple violations resulting from a 25 single act or incident. A knowing violation of this section shall be 26 punishable by a civil penalty of not more than five hundred dollars for 27 a single violation and not more than one thousand dollars for multiple 28 violations resulting from a single act or incident. No business shall be 29 deemed to have violated the provisions of this section if such business 30 shows, by a preponderance of the evidence, that the violation was not 31 intentional and resulted from a bona fide error made notwithstanding the 32 maintenance of procedures reasonably adopted to avoid such error. 33 7. The following are exempt from the requirements of this article: 34 a. any service provided by a business or its affiliate where either 35 the business or its affiliate is doing business pursuant to a franchise 36 issued by a political subdivision of the state; 37 b. any entity regulated by the department of financial services; 38 c. security system alarm operators; 39 d. banks, bank holding companies, or the subsidiary or affiliate of 40 either, or credit unions or other financial institutions, licensed under 41 state or federal law; and 42 e. service contract sellers and service contract administrators. 43 § 3. This act shall take effect on the ninetieth day after it shall 44 have become a law.
