Bill Text: NY S05024 | 2017-2018 | General Assembly | Introduced
Bill Title: Requires authorization by the customer, and verification by the telecommunications providers, of the validity of third-party charges for products and services billed to a customer on bills issued by telecommunication providers to their customers.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2018-01-03 - REFERRED TO CONSUMER PROTECTION [S05024 Detail]
Download: New_York-2017-S05024-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5024 2017-2018 Regular Sessions IN SENATE March 6, 2017 ___________ Introduced by Sens. KRUEGER, HAMILTON -- 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 requiring authorization by the customer, and verification by the telecommuni- cations providers, of the validity of third-party charges for products and services billed to a customer on bills issued by telecommuni- cations providers to their customers The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative findings and purpose. The legislature finds 2 that some third-party companies are placing unauthorized service charges 3 on telecommunications customers' monthly bills. The practice is commonly 4 called "cramming". Cramming is a form of fraud in which charges are 5 added to a bill by a third party without the customer's consent or 6 disclosure. The legislature further finds that many New Yorkers are 7 switching to phone service provided by cable TV or Internet companies. 8 These companies can also offer third-party billing that may inadvertent- 9 ly result in fraud through no fault of their own actions. Accordingly, 10 the purpose of this act is to help reduce the level of cramming and to 11 provide remedies that offer greater protection to the telecommunications 12 customers of all service providers. 13 § 2. The general business law is amended by adding a new section 399- 14 zzzzz to read as follows: 15 § 399-zzzzz. Authorization and verification for product and service 16 charges to be billed on a consumer's bill. 1. Definitions. For purposes 17 of this section: 18 (a) "Billing agent" means any entity that submits charges to the bill- 19 ing carrier on behalf of itself or any service provider. 20 (b) "Billing carrier" means any telephone corporation, as defined in 21 subdivision seventeen of section two of the public service law, and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD05525-01-7S. 5024 2 1 every cable television company, as defined in subdivision one of section 2 two hundred twelve of the public service law that provides telephone or 3 like service to customers in the state of New York, that issues a bill 4 directly to a customer for any product or service not provided by a 5 telecommunications carrier, its affiliate or third party provider with 6 whom a telephone corporation or cable television company or their affil- 7 iates jointly market services. 8 (c) "Cramming" means a form of fraud in which charges are added to a 9 bill by a third party without the subscriber's authorization or disclo- 10 sure. 11 (d) "Service provider" means any entity that offers a product or 12 service to a consumer and that directly or indirectly charges to or 13 collects from a consumer's bill received from a billing carrier an 14 amount for the product or service. For purposes of this section, a 15 service provider shall not include an affiliate of a billing carrier or 16 a third party provider with whom a billing carrier or its affiliates 17 jointly market services. 18 2. Requirements for submitting charges. (a) A service provider or 19 billing agent may submit charges for a product or service to be billed 20 on a consumer's bill only if: 21 (1) the service provider offering the product or service has clearly 22 and conspicuously disclosed all material terms and conditions of the 23 product or service being offered, including, but not limited to, all 24 charges; and the fact that the charges for the product or service shall 25 appear on the consumer's bill; 26 (2) after the clear and conspicuous disclosure of all material terms 27 and conditions by the service provider as described in subparagraph one 28 of this paragraph, the consumer has expressly consented to obtain the 29 product or service offered and to have the charges appear on the consum- 30 er's bill and the consent has been verified by the service provider as 31 provided in paragraph (b) of this subdivision; 32 (3) the service provider offering the product or service or any bill- 33 ing agent for the service provider has provided the consumer with a 34 toll-free telephone number the consumer may call and an address to which 35 the consumer may write to resolve any billing dispute and to answer 36 questions; and 37 (4) the service provider offering the product or service or the bill- 38 ing agent has taken effective steps to determine that the consumer who 39 purportedly consented to obtain the product or service offered is 40 authorized to incur charges for the telephone number to be billed. 41 (b) The consumer consent required by paragraph (a) of this subdivision 42 must be verified by the service provider offering the product or service 43 before any charges are submitted for billing on a consumer's bill. A 44 record of the consumer consent and verification must be maintained by 45 the service provider offering the product or service for a period of at 46 least twenty-four months immediately after the consent and verification 47 have been obtained. The method of obtaining consumer consent and verifi- 48 cation shall include one or more of the following: 49 (1) a writing, signed and dated by the consumer to be billed, that 50 clearly and conspicuously discloses the material terms and conditions of 51 the product or service being offered in accordance with paragraph (a) of 52 this subdivision and which clearly and conspicuously states that the 53 consumer expressly consents to be billed in accordance with the 54 provisions of this subdivision as follows:S. 5024 3 1 (A) if the writing is in electronic form, then it shall contain the 2 consumer disclosures required by Section 101(c) of the federal Electron- 3 ic Signatures in Global and National Commerce Act; and 4 (B) the writing shall be a separate document or easily separable docu- 5 ment or located on a separate screen or webpage containing only the 6 disclosures and consent described in this subdivision; 7 (2) third-party verification by an independent third party that: 8 (A) clearly and conspicuously discloses to the consumer to be billed 9 all of the information required by paragraph (a) of this subdivision; 10 (B) operates from a facility physically separate from that of the 11 service provider offering the product or service; 12 (C) is not directly or indirectly managed, controlled, directed, or 13 owned wholly or in part by the service provider offering the product or 14 service; 15 (D) does not derive commissions or compensation based upon the number 16 of sales confirmed; 17 (E) tape records the entire verification process, with prior consent 18 of the consumer to be billed; and 19 (F) obtains confirmation from the consumer to be billed that he or she 20 authorized the purchase of the offered good or service. 21 All verifications must be conducted in the same language that was used 22 in the underlying sales transaction. 23 (c) Unless verification is required by federal law or rules implement- 24 ing federal law, the provisions of paragraph (b) of this subdivision 25 shall not apply to customer-initiated transactions with a certificated 26 telecommunications carrier for which the service provider has the appro- 27 priate documentation. 28 (d) The provisions of this section shall not apply to commercial 29 mobile radio services, or message telecommunications service charges 30 that the end-user customer initiates by dialing 1+, 0+, 0-, 1010XXX, or 31 collect calls and charges for video services if the service provider has 32 the necessary records to establish the billing for the call or service. 33 3. Records of disputed charges. (a) Every service provider or billing 34 agent shall maintain records of every disputed charge for a product or 35 service placed on a consumer's bill. 36 (b) The record required under this subdivision shall contain for every 37 disputed charge all of the following: 38 (1) any affected telephone numbers and, if available, addresses; 39 (2) the date the consumer requested that the disputed charge be 40 removed from the consumer's bill; 41 (3) the date the disputed charge was removed from the consumer's bill; 42 and 43 (4) the date action was taken to refund or credit to the consumer any 44 money that the consumer paid for the disputed charges. 45 (c) The record required by this subdivision shall be maintained for at 46 least twenty-four months. 47 4. Compliance. Billing agents shall take reasonable steps designed to 48 ensure that service providers on whose behalf they submit charges to a 49 billing carrier comply with the requirements of this section. 50 5. Violation. Any service provider or billing agent who violates the 51 provisions of this section commits an unlawful practice. 52 (a) If a customer disputes a charge from a service provider or billing 53 agent and has it removed from their bill, neither the billing carrier, 54 service provider, or billing agent can put the same charge from the 55 service provider on any future bills unless the customer has explicitly 56 granted approval to do so.S. 5024 4 1 (b) If a customer contacts the service provider directly instead of 2 calling the billing carrier regarding an unauthorized charge on their 3 telephone bill, the service provider must agree to provide a credit 4 adjustment to the bill. Any further collection attempts on the part of 5 the service provider should not include the bill. 6 (c) Any unauthorized service charges on telecommunications customers 7 will be deemed void and unenforceable. Service providers found to have 8 submitted unauthorized service charges cannot pursue said charges 9 through collection agencies. 10 (d) Each billing carrier and billing agent shall have in place and 11 comply with a protocol for identifying unauthorized charges and suspend- 12 ing or terminating billing services to any billing agent or service 13 provider that has submitted unauthorized charges. 14 (e) If a customer contacts a billing carrier to dispute a billed item 15 from a billing agent or service provider, the billing carrier must 16 promptly address the dispute before referring the customer to the bill- 17 ing agent or service provider when the customer indicates the product or 18 service was not authorized. This includes, but is not limited to, remov- 19 ing the unauthorized charges from the customer's bill, ensuring that 20 unauthorized charges from the same service provider or billing agent 21 will not continue to appear on the customer's bill, and offering the 22 customer the option to bar all third-party billing on their bill. 23 (f) Annually, billing carriers shall provide information to their 24 customers regarding a course of action to dispute unauthorized charges 25 from service providers. This shall include, but is not limited to, a 26 definition of cramming, how to dispute an unauthorized charge, and how 27 to file a complaint with the attorney general's office. 28 (g) Third-party charges shall be separated from direct charges in a 29 clear manner. 30 (h) Billing carriers cannot disconnect services over the failure to 31 pay a disputed third party charge. 32 (i) The attorney general's office shall have the authority to investi- 33 gate complaints of cramming. 34 (j) The attorney general's office shall have the authority to pursue 35 civil action against service providers and billing agents found to have 36 been engaging in cramming. 37 (k) The attorney general's office shall have the authority to black- 38 list any service provider or billing agent who has been found to be in 39 violation of this section or otherwise participating in unscrupulous 40 practices from contracting with any billing carrier in New York state. 41 § 3. This act shall take effect on the one hundred twentieth day after 42 it shall have become a law; provided, however that effective immediate- 43 ly, the addition, amendment and/or repeal of any rule or regulation 44 necessary for the implementation of this act on its effective date are 45 authorized and directed to be made and completed on or before such 46 effective date.
