senate Bill S7567

Amended

Relates to telemarketing; repealer

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 05 / Jun / 2012
    • REFERRED TO RULES
  • 08 / Jun / 2012
    • AMEND AND RECOMMIT TO RULES
  • 08 / Jun / 2012
    • PRINT NUMBER 7567A
  • 13 / Jun / 2012
    • ORDERED TO THIRD READING CAL.1219
  • 13 / Jun / 2012
    • SUBSTITUTED BY A10569A

Summary

Relates to telemarketing; prohibits pre-recorded messages in certain circumstances; requires a mechanism for consumers to automatically add their number to the seller's do-not-call list.

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Bill Details

See Assembly Version of this Bill:
A10569
Versions:
S7567
S7567A
Legislative Cycle:
2011-2012
Law Section:
General Business Law
Laws Affected:
Rpld §399-pp sub 10 ¶ a sub¶ 5, amd §§399-pp & 399-z, Gen Bus L

Sponsor Memo

BILL NUMBER:S7567

TITLE OF BILL:

An act
to amend the general business law, in relation to telemarketing; and to
repeal certain provisions of such law relating thereto

PURPOSE:

This bill would protect New Yorkers by regulating all telemarketers
who do business in New York, wherever they may be located, and would
ensure that telemarketers comply with New York law. The bill would
also prohibit all telemarketers doing business in New York from
delivering prerecorded messages by telephone without the express
consent of the call recipient.

SUMMARY OF PROVISIONS:

Section 1 of the bill would repeal subparagraph 5 of paragraph (a) of
subdivision 10 of General Business Law § 399-pp to ensure that all
out-of-state telemarketers, as well as entities engaged in
telemarketing but otherwise licensed, registered, chartered, certified
or incorporated in any state, or by the federal government, are
covered by New York's telemarketing law.

Section 2 of the bill would amend General Business Law § 399-z, New
York's "Do Not Call" law, by, among other things: (1) prohibiting
telemarketers from initiating sales calls that deliver prerecorded
messages to recipients in New York except where the call recipient
has affirmatively and explicitly consented to receipt of such calls;
(2) requiring outbound telemarketing sales calls that deliver
prerecorded messages and could be answered by a customer to allow the
customer to assert by key-press or automated interactive voice a
do-not-call request that would automatically add the customer's phone
number to the telemarketer's do-not-call list and immediately
disconnect the call; (3) requiring outbound telemarketing sales calls
that deliver prerecorded messages and could be answered by a
customer's voice mail service or answering machine to include in the
prerecorded message a toll-free number that the customer can call to
reach an automated service that will add the customer's phone number
to the telemarketer's do-not-call list.; and (4) requiring
telemarketers to keep records of their activities for a period of
36 months.

Section 3 of the bill would make the bill effective 90 days after it
becomes law.

EXISTING LAW:

General Business Law §399-pp, the "Telemarketing and Consumer Fraud
and Abuse Prevention Act", currently exempts telemarketers otherwise
registered, chartered, certified or incorporated by a state or
Federal agency from the requirements of the law.

General Business Law §399-z establishes the "no telemarketing sales
calls statewide" registry and authorizes the transfer of telephone
numbers on the registry to the national "do-not-call" registry so that
it can serve as the statewide registry.

STATEMENT IN SUPPORT:

These amendments will better protect New Yorkers from unwanted
telemarketing calls by regulating all telemarketers - wherever they
are located.

The Department of State ("DOS") registers telemarketers pursuant to
the "Telemarketing and Consumer Fraud and Abuse Prevention Act" but
exempts from registration entities engaged in telemarketing that are
otherwise registered, chartered, certified, or licensed by another
state or a federal agency - "out-of-state" telemarketers. Without
this legislation being enacted, these telemarketers could continue to
do business in New York and not be subject to civil and criminal
penalties established for violations of that law which include fines
and criminal penalties, as well as the revocation, suspension, and
denial of renewal of registration. This legislation puts out-of-state
telemarketers on a level playing field with those telemarketers
located in-state and protects New Yorkers from harassment from
wherever it may come. This bill would also prohibit prerecorded
telemarketing calls, also known as robo-calls, without the call
recipient's express written consent, and requiring that prerecorded
calls provide an automated interactive key-press or voice-activated
opt-out mechanism that would allow recipients to automatically add
their phone number to the telemarketer's do-not-call list and then
terminate the call.

At present, only 22 telemarketers are registered in New York. In
contrast, in nearby states that require registration of out-of-state
telemarketers calling into the state, the numbers are much higher.
For example, 557 telemarketers are registered in New Jersey, 213 are
registered in Pennsylvania, and 333 are registered in Vermont. These
numbers do not reflect the true state of telemarketing.

New Yorkers have registered over 13 million phone numbers on the
Do-Not-Call registry. From 2009 to the present, the DOS's Division of
Consumer Protection has received nearly 5,000 "Do Not Call"
complaints and inquires; in just the first quarter of2012, the
Federal Trade Commission received 61,705 "Do Not Call" complaints
from New Yorkers.

BUDGET IMPLICATIONS:

Potential fines resulting from broader enforcement powers would be
added to the Consumer Protection Fund.

EFFECTIVE DATE:

This bill would take effect 90 days after becoming law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7567

                            I N  S E N A T E

                              June 5, 2012
                               ___________

Introduced  by  Sens.  ZELDIN,  MAZIARZ, FUSCHILLO -- (at request of the
  Governor) -- read twice and ordered printed, and when  printed  to  be
  committed to the Committee on Rules

AN  ACT to amend the general business law, in relation to telemarketing;
  and to repeal certain provisions of such law relating thereto

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Subparagraph 5 of paragraph a of subdivision 10 of section
399-pp of the general business law is REPEALED, subparagraph 6 of  para-
graph  a  is  renumbered  subparagraph  5, and a new subdivision 10-a is
added to read as follows:
  10-A. THE FOLLOWING PERSONS  ARE  EXEMPT  FROM  THE  FEE  AND  BONDING
REQUIREMENTS  SET FORTH IN PARAGRAPH F OF SUBDIVISION THREE AND SUBDIVI-
SION FOUR OF THIS SECTION: A PERSON ENGAGED IN A BUSINESS OR  OCCUPATION
WHICH IS LICENSED, REGISTERED, CHARTERED, CERTIFIED OR INCORPORATED WITH
OR  BY  ANY  STATE  OR FEDERAL AGENCY. PROVIDED, HOWEVER, ANY PERSON NOT
LICENSED, REGISTERED, CHARTERED, CERTIFIED OR INCORPORATED WITH ANY  NEW
YORK  STATE OR FEDERAL AGENCY, SHALL SUBMIT EVIDENCE TO THE SECRETARY OF
STATE, IN A FORM AND MANNER TO BE PRESCRIBED BY THE  SECRETARY,  OF  ANY
LICENSE, REGISTRATION, CHARTER, CERTIFICATION OR INCORPORATION ISSUED BY
AN AGENCY OR GOVERNMENTAL ENTITY IN THIS OR ANY OTHER STATE.
  S 2.  Section 399-z of the general business law, as amended by chapter
344 of the laws of 2010, paragraphs a and b of subdivision 1 as added by
section 39, subdivision 4 as amended by section 40 and subdivisions 6, 7
and  8  as  amended by section 41 of part A of chapter 62 of the laws of
2011, is amended to read as follows:
  S 399-z. Telemarketing; establishment of no telemarketing sales  calls
statewide  registry;  authorization of the transfer of telephone numbers
on the no telemarketing sales calls statewide registry to  the  national
"do-not-call"  registry. 1. As used in this section, the following terms
shall have the following meanings:
  a. "Department" shall mean the department of state.
  b. "Secretary" shall mean the secretary of state.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12139-06-2

S. 7567                             2

  c. "Customer" means any natural person who is a resident of this state
and who is or may be required to pay for or  to  exchange  consideration
for goods and services offered through telemarketing;
  d.  "Doing  business  in this state" means conducting telephonic sales
calls: (i) from a location in  this  state;  or  (ii)  from  a  location
outside of this state to consumers residing in this state;
  e.  "Goods  and  services"  means  any  goods  and services, and shall
include any real property or any tangible personal property or  services
of any kind;
  f.  "Negative  option feature" means, in an offer or agreement to sell
or provide any goods or services, a provision under which the customer's
silence or failure to take an affirmative action to reject such goods or
services or to cancel the agreement is  interpreted  by  the  seller  as
acceptance of the offer.
  g.  "Person" means any natural person, association, partnership, firm,
corporation and its affiliates or subsidiaries or other business entity;
  h. "Telemarketer" means  any  person  who,  for  financial  profit  or
commercial  purposes in connection with telemarketing, makes telemarket-
ing sales calls to a customer when the customer is in this state or  any
person  who directly controls or supervises the conduct of a telemarket-
er. For the purposes of this section, "commercial purposes"  shall  mean
the sale or offer for sale of goods or services;
  [.]  i.  "Telemarketing"  means  any plan, program or campaign [which]
THAT is conducted to induce payment or the exchange of any other consid-
eration for any goods or services [by use of one or more telephones  and
which]  THAT  involves more than one telephone call by a telemarketer in
which the customer is located within the state at the time of the  call.
Telemarketing  does  not include the solicitation of sales through media
other than by telephone calls AND DOES NOT  INCLUDE  CALLS  INTENDED  TO
IMPLEMENT OR COMPLETE A TRANSACTION TO WHICH THE CUSTOMER HAS PREVIOUSLY
CONSENTED;
  j.  "Telemarketing  sales call" means a telephone call made by a tele-
marketer or by any outbound telephone calling technology that delivers a
prerecorded message [either] to a customer or to  [their]  A  CUSTOMER'S
voicemail  or  answering  machine  service  for  the purpose of inducing
payment or the exchange of any other  consideration  for  any  goods  or
services;
  k.  "Unsolicited  telemarketing  sales  call"  means any telemarketing
sales call other than a call made:
  (i) in response to an express written or verbal request  [of]  BY  the
customer [called]; or
  (ii)  in  connection  with an established business relationship, which
has not been terminated by either party, unless such customer has stated
to the telemarketer that such customer no longer wishes to  receive  the
telemarketing sales calls of such telemarketer.
  2. No telemarketer or seller shall engage in telemarketing at any time
other than between 8:00 A.M. and 9:00 P.M.  [local time] AT THE LOCATION
OF  THE  CUSTOMER  unless  the  [consumer] CUSTOMER has given his or her
express consent to the call at a different  time[,  and].  TELEMARKETERS
shall  provide,  in  a clear and coherent manner using words with common
and everyday meanings, at the beginning of each telemarketing sales call
all of the following information:
  [(i)] A. the telemarketer's name and the person on  whose  behalf  the
solicitation is being made, if other than the telemarketer;
  [(ii)] B. the purpose of the telephone call; and

S. 7567                             3

  [(iii)]  C. the identity of the goods or services for which a fee will
be charged.
  3.  Prior  to the purchase of any good or service, telemarketers shall
disclose to the customer the cost of the goods or services that are  the
subject of the call and if the offer includes a negative option feature,
all  material  terms  and  conditions  of  the  negative option feature,
including, but not limited to the fact that the customer's account  will
be  charged unless the customer takes an affirmative action to avoid the
charges, the dates the charges will be submitted for  payment,  and  the
specific steps the customer must take to avoid the charge.
  4.  a. The department is authorized to establish, manage, and maintain
a no telemarketing sales calls statewide registry which shall contain  a
list  of  customers who do not wish to receive unsolicited telemarketing
sales calls.   The department may contract  with  a  private  vendor  to
establish,  manage  and  maintain  such  registry,  provided the private
vendor has maintained national no telemarketing sales  calls  registries
for more than two years, and the contract requires the vendor to provide
the  no telemarketing sales calls registry in a printed hard copy format
and in any other format as prescribed by the department.
  b. The department is authorized to  have  the  national  "do-not-call"
registry  established,  managed  and  maintained  by  the  federal trade
commission pursuant to 16 C.F.R. Section 310.4 (b) (1) (iii)  (B)  serve
as  the  New  York state no telemarketing sales calls statewide registry
provided for by this section. The department is  further  authorized  to
take whatever administrative actions may be necessary or appropriate for
such  transition  including, but not limited to, providing the telephone
numbers of New York customers registered on the no  telemarketing  sales
calls  statewide registry to the federal trade commission, for inclusion
on the national "do-not-call" registry.
  5. No telemarketer or seller may make or cause to be made any unsolic-
ited telemarketing sales call to any customer when that customer's tele-
phone number has been on the  national  "do-not-call"  registry,  estab-
lished  by the federal trade commission, for a period of thirty-one days
prior to the date the call is made, pursuant to 16 [CFR] C.F.R.  Section
310.4(b)(1)(iii)(B).
  6.    NO TELEMARKETER OR SELLER SHALL INITIATE ANY TELEMARKETING SALES
CALL BY MEANS OF A TECHNOLOGY  THAT  DELIVERS  A  PRE-RECORDED  MESSAGE,
UNLESS  THE  TELEMARKETER  OR  SELLER  HAS OBTAINED FROM THE CUSTOMER AN
EXPRESS AGREEMENT, IN WRITING THAT:
  A. THE TELEMARKETER OR SELLER OBTAINED ONLY AFTER A CLEAR AND CONSPIC-
UOUS DISCLOSURE THAT THE PURPOSE OF THE AGREEMENT IS  TO  AUTHORIZE  THE
SELLER TO MAKE TELEMARKETING SALES CALLS TO SUCH CUSTOMER;
  B.  THE TELEMARKETER OR SELLER OBTAINED WITHOUT REQUIRING, DIRECTLY OR
INDIRECTLY, THAT THE AGREEMENT BE EXECUTED AS A CONDITION OF  PURCHASING
ANY GOOD OR SERVICE;
  C.  EVIDENCES THE WILLINGNESS OF THE CUSTOMER TO RECEIVE TELEMARKETING
SALES CALLS BY OR MADE ON BEHALF OF A SPECIFIC SELLER; AND,
  D. INCLUDES SUCH CUSTOMER'S TELEPHONE NUMBER AND SIGNATURE.
  7. IN THE CASE OF ANY TELEMARKETING SALES CALL DELIVERED BY MEANS OF A
TECHNOLOGY THAT DELIVERS A PRE-RECORDED MESSAGE THAT COULD  BE  RECEIVED
BY A CUSTOMER WHO CAN USE AN AUTOMATED INTERACTIVE VOICE AND/OR KEYPRESS
ACTIVATED  OPT-OUT  MECHANISM TO ASSERT A DO-NOT-CALL REQUEST, SUCH CALL
SHALL INCLUDE A MECHANISM THAT ALLOWS THE CUSTOMER TO AUTOMATICALLY  ADD
THE  NUMBER CALLED TO THE SELLER'S ENTITY SPECIFIC DO-NOT-CALL LIST, AND
WHICH MECHANISM, ONCE INVOKED, IMMEDIATELY ENDS THE CALL.

S. 7567                             4

  8. IN THE CASE OF ANY TELEMARKETING SALES CALL DELIVERED BY MEANS OF A
TECHNOLOGY THAT DELIVERS A PRE-RECORDED MESSAGE THAT COULD  BE  ANSWERED
BY  AN  ANSWERING  MACHINE OR VOICEMAIL SERVICE, THAT THE CALL INCLUDE A
TOLL-FREE NUMBER THAT MUST CONNECT THE CUSTOMER DIRECTLY TO AN AUTOMATED
INTERACTIVE  VOICE  OR  KEYPRESS ACTIVATED OPT-OUT MECHANISM THAT ALLOWS
THE CONSUMER TO AUTOMATICALLY ADD THE  NUMBER  CALLED  TO  THE  SELLER'S
ENTITY  SPECIFIC  DO-NOT-CALL  LIST,  AND WHICH MECHANISM, ONCE INVOKED,
IMMEDIATELY ENDS THE CALL.
  9. TELEMARKETERS AND SELLERS SHALL KEEP FOR  A  PERIOD  OF  THIRTY-SIX
MONTHS FROM THE DATE THE RECORD IS CREATED RECORDS RELATING TO ITS TELE-
MARKETING ACTIVITIES.
  10.  a. The department shall provide notice to customers of the estab-
lishment of the national "do-not-call" registry. Any customer who wishes
to be included on such registry shall notify the federal  trade  commis-
sion as directed by relevant federal regulations.
  b. Any  company that provides local telephone directories to customers
in this state shall inform its  customers  of  the  provisions  of  this
section by means of publishing a notice in such local telephone directo-
ries.
  [7.]  11. When the department has reason to believe a telemarketer has
engaged in repeated unlawful acts in violation of this section, or  when
a  notice  of  hearing  has  been issued pursuant to subdivision [eight]
TWELVE of this section,  the  department  may  request  in  writing  the
production  of  relevant  documents  and records as part of its investi-
gation. If the person upon whom such request was made fails  to  produce
the  documents  or  records  within  thirty  days  after the date of the
request, the department may issue and  serve  subpoenas  to  compel  the
production  of such documents and records. If any person shall refuse to
comply with a subpoena issued under this  section,  the  department  may
petition  a  court of competent jurisdiction to enforce the subpoena and
such sanctions as the court may direct.
  [8.] 12. a. Where it is determined after hearing that any  person  has
violated  one  or more provisions of this section, the secretary, or any
person deputized or so designated by him or her may assess a fine not to
exceed eleven thousand dollars for each violation.
  b. Any proceeding conducted pursuant to paragraph a of  this  subdivi-
sion shall be subject to the state administrative procedure act.
  c.  Nothing  in  this  subdivision  shall be construed to restrict any
right which any person may have under any other  statute  or  at  common
law.
  [9.]  13. A person shall not be held liable for violating this section
if:
  a. the person has obtained a version  of  the  "do-not-call"  registry
from  the federal trade commission no more than thirty-one days prior to
the date any telemarketing call is made, pursuant to 16  C.F.R.  Section
310.4(b)(1)(iii)(B), and THE PERSON CAN DEMONSTRATE THAT, AS PART OF THE
PERSON'S  ROUTINE BUSINESS PRACTICE AT THE TIME OF AN ALLEGED VIOLATION,
IT has established, implemented and updated written policies and  proce-
dures  related to the requirements of this section prior to the date any
telemarketing call is made;
  b. the person has trained his or her personnel in the requirements  of
this section; and
  c.  the person maintains AND CAN PRODUCE records demonstrating compli-
ance with paragraphs a and b of this subdivision and the requirements of
this section.

S. 7567                             5

  [10.] 14. The [board] DEPARTMENT shall prescribe rules and regulations
to administer this section.
  15.  SEVERABILITY.  IF ANY CLAUSE, SENTENCE, PARAGRAPH OR PART OF THIS
SECTION SHALL BE ADJUDGED BY ANY COURT OF COMPETENT JURISDICTION  TO  BE
INVALID,  SUCH  JUDGMENT  SHALL  NOT  AFFECT,  IMPAIR  OR INVALIDATE THE
REMAINDER THEREOF, BUT SHALL BE CONFINED IN ITS OPERATION TO THE CLAUSE,
SENTENCE, PARAGRAPH OR PART THEREOF DIRECTLY INVOLVED IN THE CONTROVERSY
IN WHICH SUCH JUDGMENT SHALL HAVE BEEN RENDERED.
  S 3. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

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