senate Bill S2432

Amended

Prohibits fee charges for payment of an account regardless of the method of payment

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Sponsor

Co-Sponsors

Bill Status


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

  • 17 / Jan / 2013
    • REFERRED TO CONSUMER PROTECTION
  • 29 / Apr / 2013
    • 1ST REPORT CAL.445
  • 30 / Apr / 2013
    • 2ND REPORT CAL.
  • 01 / May / 2013
    • ADVANCED TO THIRD READING
  • 12 / Jun / 2013
    • AMENDED ON THIRD READING 2432A
  • 21 / Jun / 2013
    • COMMITTED TO RULES
  • 08 / Jan / 2014
    • REFERRED TO CONSUMER PROTECTION
  • 03 / Feb / 2014
    • 1ST REPORT CAL.84
  • 04 / Feb / 2014
    • 2ND REPORT CAL.
  • 10 / Feb / 2014
    • ADVANCED TO THIRD READING
  • 20 / Jun / 2014
    • COMMITTED TO RULES

Summary

Prohibits fee charges for payment of an account regardless of the method of payment.

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Bill Details

Versions:
S2432
S2432A
Legislative Cycle:
2013-2014
Current Committee:
Senate Rules
Law Section:
General Business Law
Laws Affected:
Amd ยง399-zzz, Gen Bus L
Versions Introduced in 2011-2012 Legislative Cycle:
S6728A

Votes

9
0
9
Aye
0
Nay
2
aye with reservations
0
absent
0
excused
0
abstained
show Consumer Protection committee vote details

Sponsor Memo

BILL NUMBER:S2432

TITLE OF BILL:
An act
to amend the general business law, in relation to prohibiting fee
charges for payment of an account regardless of the method of payment

PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to protect consumers from unfair payment
fees.

SUMMARY OF SPECIFIC PROVISIONS:
This bill would prohibit any person or business entity from charging a
consumer an additional rate or fee or a differential in the rate or
fee associated with payment on an account, whether such payment is
made by mail, electronic transfer, telephone authorization, or other
means, unless such payment involves an expedited service by a service
representative of the person, partnership, corporation, association
or other business entity.

JUSTIFICATION:
In recent months, there have been instances of major companies
announcing plans to impose an additional fee on the accounts of
customers that choose certain payment methods, such as one-time
payments made online or over the telephone. Such payment fees
unfairly penalize certain consumers and may disproportionately impact
low- and moderate-income consumers. In today's world of
highly-automated payment systems, the cost of processing payments is
often nominal and considered a standard cost of doing business that
is included in the total rate or amount charged for services. The
recent emergence of proposals that would set payment fees at levels
that appears to be significantly higher than the actual cost of
processing payments has generated thousands of consumer complaints.

During these tough economic times, many consumers are struggling to
pay their bills and must budget very carefully. These consumers
should not be forced to bear the burden of an additional payment
charge, unless expedited service is provided. Under this legislation,
businesses interested in encouraging the use of certain payment
methods may elect to implement incentive-based programs that do not
penalize consumers. Several major companies have successfully
convinced customers to use electronic billing by providing an
incentive to switch from paper billing.

This legislation would expand upon the provisions of section 399-zzz of
the General Business Law, which prohibits businesses from charging
customers an additional rate or fee when the consumer chooses to pay by
United States mail or received a paper billing statement. The bill's
provisions are also consistent with the federal Credit C.A.R.D. Act
of 2009, which similarly restricts the ability of card issuers to
impose payment fees on cardholder accounts.

PRIOR LEGISLATIVE HISTORY:
2012: S. 6728 - Referred to Consumer Affairs


FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None to the State.

EFFECTIVE DATE: This act shall take effect on January
1st next succeeding.

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

                                  2432

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 17, 2013
                               ___________

Introduced  by  Sens.  KLEIN, MAZIARZ -- 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 fee
  charges for payment of an account regardless of the method of payment

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

  Section 1. Subdivision 1 of section 399-zzz of  the  general  business
law,  as added by chapter 556 of the laws of 2010, is amended to read as
follows:
  1. (A) Subject to federal law and regulation, no person,  partnership,
corporation, association or other business entity shall charge a consum-
er  an additional rate or fee or a differential in the rate or fee asso-
ciated with payment on an account:
  (I) when the consumer chooses  to  [pay  by  United  States  mail  or]
receive a paper billing statement; OR
  (II)  WHETHER SUCH PAYMENT IS MADE BY MAIL, ELECTRONIC TRANSFER, TELE-
PHONE AUTHORIZATION, OR OTHER MEANS, UNLESS  SUCH  PAYMENT  INVOLVES  AN
EXPEDITED  SERVICE  BY  A SERVICE REPRESENTATIVE OF THE PERSON, PARTNER-
SHIP, CORPORATION, ASSOCIATION OR OTHER BUSINESS ENTITY.
  (B) This subdivision shall not be  construed  to  prohibit  a  person,
partnership,  corporation,  association  or  other  business entity from
offering consumers a credit or  other  incentive  to  elect  a  specific
payment or billing option.
  S  2. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03106-02-3

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