NY State Assembly Bill 2009-A11005

Assembly Bill A11005

2009-2010 Legislative Session

Requires clear and conspicuous disclosure of the fees and restrictions prior to the sale of a prepaid debit card

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Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 24, 2010	print number 11005a
Jun 24, 2010	amend and recommit to codes
May 25, 2010	reported referred to codes
May 06, 2010	referred to consumer affairs and protection

Bill Amendments

Original

A (Active)

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multi-Sponsors

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2009-A11005 - Details

See Senate Version of this Bill:: S7608
Current Committee:: Assembly Codes
Law Section:: General Business Law
Laws Affected:: Add §396-ii, Gen Bus L

2009-A11005 - Summary

Requires clear and conspicuous disclosure of the fees and restrictions prior to the sale of a prepaid debit card.

2009-A11005 - Sponsor Memo

                                BILL NUMBER:A11005

TITLE OF BILL:  An act to amend the general business law, in relation to
general use prepaid cards

PURPOSE OF THE BILL:

This bill would require issuers of general use prepaid cards to disclose
all fees associated with the use of such card, prior to their sale.

SUMMARY OF PROVISIONS:

Section 1 of the bill would add a new General Business Law (GBL) § 396-
ii which would include the following provisions:

* GBL § 396-ii(1) would set forth definitions, as follows:

o "General use prepaid card" would be defined as a card or other payment
code or device issued by any individual, firm, company, partnership,
limited liability company, corporation or entity that upon presentation
is (i) redeemable at multiple, unaffiliated merchants or service provid-
ers, or automated teller machines; (ii) issued in a requested amount,
whether or not that amount may, at the option of the issuer, be reloaded
to increase its value a later period in time; (iii) purchased or loaded
on a prepaid basis; and, (iv) honored by merchants for goods and
services, or (v) used to access cash at automated teller machines.

o "Clear and conspicuous" or "clearly and conspicuously" would be
defined as notice in larger type than the surrounding text, or in
contrasting type, font, or color to the surrounding text of the same
size, or set off from the surrounding text of the same size by symbols
or other marks, in a manner that clearly calls attention to the
language. In the case of an audio disclosure, "clear and conspicuous"
and "clearly and conspicuously" means in a volume and cadence sufficient
to be readily audible and understandable.

* GBL § 396-ii(2) would provide that a general use prepaid card must
provide clear and conspicuous notice that "important terms and condi-
tions affecting the balance apply" on the card, and prior to the sale of
a general use prepaid card the consumer must receive clear and conspicu-
ous notice in any such card advertisements or offers made that "impor-
tant terms and conditions affecting the balance apply."

* GBL § 396-ii(3) would provide that clear and conspicuous disclosure of
pertinent enumerated terms and fees that contribute to the costs associ-
ated with general use prepaid cards be made available to consumers prior
to purchase. Such notice would be provided to consumers either via a
toll-free telephone number, if an active toll-free telephone number is
clearly and conspicuously provided on an envelope or the packaging
containing the general use prepaid card, or on a printed document accom-
panying the general use prepaid card.

* GBL §396-ii(4) would provide that subdivisions 2 and 3 do not apply to
general use prepaid cards that have no terms and conditions.

* GBL § 396-ii(5) would provide that nothing in this section would
prevent any unclaimed general use prepaid card funds become abandoned
property in accordance with the laws therein.

* GBL § 396-ii(6) would provides the Attorney General of the State of
New York with enforcement authority.

* GBL § 396-ii(7) would bar retroactive fees on general use prepaid
cards.

* GBL § 396-ii(8) would require that this statute preempt local laws on
the same subject.

Section 2 of the bill would provide for an effective of the January 1
following enactment.

EXISTING LAW:

None.

LEGISLATIVE HISTORY:

This is new bill.

STATEMENT IN SUPPORT:

General use prepaid cards, also known as "prepaid debit cards" and
"stored value cards," have emerged as a new product in the past decade.
In essence, a consumer may purchase such a card and add a certain sum to
it to use at any merchant that accepts the brand of the major credit
card that is associated with that prepaid card (i.e.  Visa, Master Card,
American Express or Discover), or to access cash at an automated teller
machine. The distinction between a general use prepaid card and a
prepaid gift card bearing a major credit card logo is that a general use
prepaid card can be used to access cash via an electronic payment system
that is linked to a deposit account.

As general use prepaid cards continue to grow in popularity with the
"unbanked," those persons who either chose not to use banking services,
or who are unable to access banking and credit services because of poor
credit history or legal status in the United States.(1) General use
prepaid cards offer the unbanked the ability to make Internet purchases
and bill payments, and to learn about financial transactions, fostering
financial literacy. Thus, they can facilitate an introduction of the
unbanked into the financial mainstream.

Unfortunately, there are often numerous fees associated with general use
prepaid cards. The State Banking Department lists fourteen different
fees that may be assessed against the sum of a general use prepaid

card.(2) Such fees vary greatly. For example, one card imposes a $99
application fee and the next month charges a $27.95 maintenance fee.(3)
Other charges imposed upon consumers by such cards include fees for
calls made to the customer service number, use of the card to pay a
bill, declining an automated teller transaction, use of the card for
purchases, and balance inquiries.

Recent New York Times and Business Week articles highlight the need for
regulatory oversight of prepaid debit cards.(4) Currently, general use
prepaid card issuers are free to charge whatever fees they choose for
any service provided without informing the consumer that (a) such fees
are applicable and (b) the amount of such fees.

This bill enhances protections for New Yorkers and provides that any
general use prepaid card being offered for sale clearly and conspicuous-
ly disclose on the card that "important terms and conditions affecting
the balance apply." The proposal also requires that all pertinent terms
and fees, which create a cost associated with the general use prepaid
card, be clearly and conspicuously disclosed to consumers prior to
purchase, either via an active toll free number that is provided on the
envelope or packaging of the card, or in printed material accompanying
the card.

Additionally, the legislation requires that clear and conspicuous notice
that "important terms and conditions affecting the balance apply" be
provided in offers or advertisements enticing the sale of any general
use prepaid card.

This measure would define general use prepaid cards by using the defi-
nition recently set forth in the federal Credit Card Accountability,
Responsibility and Disclosure (CARD) Act of 2009.  While the CARD Act of
2009 defines and places limitations on general use prepaid cards, it
only required that dormancy, inactivity, and service fees be disclosed.

In 2008, consumers loaded about $8.7 billion onto prepaid cards, which
was a 125 percent increase over the previous year. Thus, it is imper-
ative that consumers be provided with all the information necessary to
make important financial decisions regarding such cards.

BUDGET IMPLICATIONS:

None.

EFFECTIVE DATE:

This bill would take effect on the first of January next succeeding the
date on which it shall have become a law.

FOOTNOTES:
(1) A Summary of the Roundtable Discussion on Stored Value Cards and
Other Prepaid Products, The Federal Reserve Board, (November 12, 2004).

(2) Consumer Help and Information: Cards. Cards. Cards....and What You
Need to Know About Using 171em, New York State Banking Department,
(November 2009). See www.banking.state.ny.us/brcard.htm
(3) The Card Game - Prepaid, but Not Prepared for Debit Card Fees, New
York Times, (October 6, 2009).  (4) Id., and Let's End the Debit Card
Fee-for-All, Business Week (October 15, 2009).

2009-A11005 - Bill Text download pdf

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

                                  11005

                          I N  A S S E M B L Y

                               May 6, 2010
                               ___________

Introduced  by  M. of A. PHEFFER, CHRISTENSEN, BENEDETTO, STIRPE, GALEF,
  JAFFEE, NOLAN, ROSENTHAL, KOON, TITUS, FIELDS -- Multi-Sponsored by --
  M.  of  A.  BOYLAND,  CRESPO,  DESTITO,  GLICK,  GOTTFRIED,  JEFFRIES,
  KAVANAGH,  MAGEE,  MAYERSOHN, REILLY, ROBINSON, TOBACCO -- (at request
  of the Consumer Protection Board) -- read once  and  referred  to  the
  Committee on Consumer Affairs and Protection

AN  ACT  to  amend  the general business law, in relation to general use
  prepaid cards

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

  Section 1. The general business law is amended by adding a new section
396-ii to read as follows:
  S  396-II. GENERAL USE OF PREPAID CARDS. 1.  DEFINITIONS. (A) "GENERAL
USE PREPAID CARD" MEANS A CARD OR OTHER PAYMENT CODE OR DEVICE ISSUED BY
ANY INDIVIDUAL, FIRM, COMPANY, PARTNERSHIP, LIMITED  LIABILITY  COMPANY,
CORPORATION  OR ENTITY THAT UPON PRESENTATION IS (I) REDEEMABLE AT UNAF-
FILIATED MERCHANTS OR SERVICE PROVIDERS, OR AUTOMATED  TELLER  MACHINES;
(II)  ISSUED  IN  A REQUESTED AMOUNT, WHETHER OR NOT THAT AMOUNT MAY, AT
THE OPTION OF THE ISSUER, BE RELOADED TO INCREASE ITS VALUE AT  A  LATER
PERIOD  IN  TIME; (III) PURCHASED OR LOADED ON A PREPAID BASIS; AND (IV)
HONORED BY MERCHANTS FOR GOODS AND SERVICES, OR (V) USED TO ACCESS  CASH
AT AN AUTOMATED TELLER MACHINE. SUCH TERM SHALL NOT INCLUDE AN ELECTRON-
IC  BENEFIT TRANSFER CARD ISSUED PURSUANT TO SECTION TWENTY-ONE-A OF THE
SOCIAL SERVICES LAW.
  (B) "CLEAR AND CONSPICUOUS" OR "CLEARLY AND  CONSPICUOUSLY"  MEANS  IN
LARGER  TYPE THAN THE SURROUNDING TEXT, OR IN CONTRASTING TYPE, FONT, OR
COLOR TO THE SURROUNDING TEXT OF THE SAME SIZE,  OR  SET  OFF  FROM  THE
SURROUNDING TEXT OF THE SAME SIZE BY SYMBOLS OR OTHER MARKS, IN A MANNER
THAT  CLEARLY  CALLS  ATTENTION TO THE LANGUAGE. IN THE CASE OF AN AUDIO
DISCLOSURE, "CLEAR AND  CONSPICUOUS"  AND  "CLEARLY  AND  CONSPICUOUSLY"
MEANS  IN  A  VOLUME  AND  CADENCE  SUFFICIENT TO BE READILY AUDIBLE AND
UNDERSTANDABLE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16092-01-0

A. 11005                            2

  2. PRIOR TO THE SALE OF A GENERAL USE PREPAID CARD, THE CONSUMER SHALL
RECEIVE CLEAR AND CONSPICUOUS DISCLOSURE THAT TERMS AND CONDITIONS APPLY
TO SUCH CARD. SUCH CLEAR AND CONSPICUOUS DISCLOSURE SHALL INCLUDE:
  (A)  NOTICE  ON  THE GENERAL USE PREPAID CARD STATING "IMPORTANT TERMS
AND CONDITIONS AFFECTING THE BALANCE APPLY";
  (B) NOTICE IN ALL  ADVERTISEMENTS,  SOLICITATIONS  OR  PROMOTIONS  FOR
GENERAL USE PREPAID CARDS, WHICH SHALL STATE "IMPORTANT TERMS AND CONDI-
TIONS AFFECTING THE BALANCE APPLY";
  (C) IN ANY WRITTEN OR VERBAL OFFER A STATEMENT THAT ADVISES "IMPORTANT
TERMS AND CONDITIONS AFFECTING THE BALANCE APPLY"; AND
  (D)  FOR  PURCHASES  VIA  ELECTRONIC,  COMPUTER,  OR TELEPHONIC MEANS,
NOTICE THAT "IMPORTANT TERMS AND CONDITIONS AFFECTING THE BALANCE APPLY"
SHALL BE PROVIDED PRIOR TO THE CUSTOMER'S PURCHASE OF  THE  GENERAL  USE
PREPAID CARD, OR WRITTEN NOTICE WITHIN THE ELECTRONIC MESSAGE OFFERING A
GENERAL USE PREPAID CARD FOR PURCHASE.
  3.  (A)  THE  FOLLOWING  TERMS AND CONDITIONS OF A GENERAL USE PREPAID
CARD SHALL BE CLEARLY AND CONSPICUOUSLY DISCLOSED PRIOR TO THE  SALE  OF
THE  GENERAL  USE  PREPAID  CARD: (I) THE EXPIRATION DATE; (II) ANY FEES
ASSESSED TO ACTIVATE OR INITIATE THE GENERAL USE PREPAID CARD; (III) ANY
FEES CHARGED AGAINST THE  BALANCE  OF  THE  GENERAL  USE  PREPAID  CARD,
INCLUDING  BUT  NOT  LIMITED  TO  MAINTENANCE FEES, MONTHLY FEES, ANNUAL
FEES, POINT OF SALE FEES, AUTOMATED  TELLER  MACHINE  TRANSACTION  FEES,
OUT-OF-NETWORK  AND  INTERNATIONAL AUTOMATED TELLER MACHINE FEES, TRANS-
ACTION LIMIT FEES, BILL PAYMENT FEES, PHONE OR ONLINE TRANSACTION  FEES,
MONEY  TRANSFER  FEES,  INACTIVITY  FEES, DISPUTE FEES, CUSTOMER SERVICE
CALL FEES, AND RELOAD FEES CHARGED BY THIRD PARTIES; (IV) ANY CONDITIONS
WHICH LIMIT A CONSUMER'S ABILITY TO ACCESS THE FULL VALUE OF  THE  MONEY
PLACED  ON  THE  GENERAL  USE  PREPAID  CARD;  (V) WHETHER A FEE WILL BE
CHARGED FOR THE REPLACEMENT OF A GENERAL USE PREPAID CARD THAT IS  LOST,
STOLEN,  OR DESTROYED; (VI) ANY POLICIES RELATED TO REFUNDS, WARRANTIES,
CHANGES IN TERMS AND CONDITION, ASSIGNMENT AND  WAIVER;  AND  (VII)  ANY
ADDITIONAL TERMS AND CONDITIONS.
  (B)  ANY  GENERAL  USE  PREPAID  CARD TERMS AND CONDITIONS PURSUANT TO
PARAGRAPH (A) OF THIS SUBDIVISION SHALL BE PROVIDED  EITHER  (I)  VIA  A
TOLL  FREE  TELEPHONE NUMBER, IF AN ACTIVE TOLL FREE TELEPHONE NUMBER IS
CLEARLY AND CONSPICUOUSLY PROVIDED ON AN ENVELOPE OR PACKAGING  CONTAIN-
ING THE GENERAL USE PREPAID CARD, ALONG WITH A NOTICE ADVISING CONSUMERS
THAT  SUCH NUMBER PROVIDES IMPORTANT INFORMATION FOR CONSUMERS TO ACCESS
THE COST OF THE CARD AND THE IMPORTANT TERMS AND CONDITIONS; OR (II)  ON
A  PRINTED  DOCUMENT ACCOMPANYING THE GENERAL USE PREPAID CARD, PROVIDED
THAT THE  CONSUMER  CAN  EASILY  REVIEW  SUCH  PRINTED  DOCUMENT  BEFORE
PURCHASING  THE  CARD,  AND  AN  ACTIVE  TOLL  FREE  TELEPHONE NUMBER IS
INCLUDED FOR THE CONSUMER TO ACCESS FURTHER INFORMATION.
  4. THE REQUIREMENTS OF SUBDIVISIONS TWO  AND  THREE  OF  THIS  SECTION
SHALL  NOT  APPLY  TO  A  GENERAL USE PREPAID CARD THAT HAS NO TERMS AND
CONDITIONS.
  5. NOTHING IN THIS SECTION SHALL BE  CONSTRUED  TO  PREVENT  UNCLAIMED
FUNDS RELATED TO GENERAL USE PREPAID CARDS FROM BECOMING ABANDONED UNDER
SECTION THIRTEEN HUNDRED FIFTEEN OF THE ABANDONED PROPERTY LAW.
  6. WHENEVER THERE SHALL BE A VIOLATION OF THIS SECTION, AN APPLICATION
MAY  BE  MADE  BY  THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE
STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A SPECIAL
PROCEEDING TO ISSUE AN INJUNCTION, AND UPON NOTICE TO THE  DEFENDANT  OF
NOT  LESS THAN FIVE DAYS, TO ENJOIN AND RESTRAIN THE CONTINUANCE OF SUCH
VIOLATIONS; AND IF IT SHALL APPEAR TO THE SATISFACTION OF THE  COURT  OR
JUSTICE  THAT  THE  DEFENDANT  HAS,  IN FACT, VIOLATED THIS SECTION, AND

A. 11005                            3

INJUNCTION MAY BE  ISSUED  BY  SUCH  COURT  OR  JUSTICE,  ENJOINING  AND
RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT  REQUIRING PROOF THAT ANY
PERSON HAS, IN FACT, BEEN  INJURED  OR  DAMAGED  THEREBY.  IN  ANY  SUCH
PROCEEDING,  THE  COURT  MAY  MAKE ALLOWANCES TO THE ATTORNEY GENERAL AS
PROVIDED IN PARAGRAPH SIX OF SUBDIVISION  (A)  OF  SECTION  EIGHTY-THREE
HUNDRED  THREE  OF  THE CIVIL PRACTICE LAW AND RULES AND DIRECT RESTITU-
TION. WHENEVER THE COURT  SHALL  DETERMINE  THAT  A  VIOLATION  OF  THIS
SECTION  HAS  OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF NOT MORE
THAN ONE THOUSAND DOLLARS FOR EACH VIOLATION.  IN  CONNECTION  WITH  ANY
SUCH  APPLICATION,  THE ATTORNEY GENERAL IS AUTHORIZED TO TAKE PROOF AND
MAKE A DETERMINATION OF THE RELEVANT FACTS AND  TO  ISSUE  SUBPOENAS  IN
ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
  7. NO RETROACTIVE FEES SHALL BE ASSESSED AGAINST A GENERAL USE PREPAID
CARD.
  8. THE PROVISIONS OF THIS SECTION SHALL BE EXCLUSIVE AND SHALL PREEMPT
ANY  PROVISIONS  OF  LOCAL LAW, ORDINANCE OR CODE, AND NO LOCALITY SHALL
IMPOSE REQUIREMENTS THAT ARE INCONSISTENT WITH OR MORE RESTRICTIVE  THAN
THOSE SET FORTH IN THIS SECTION.
  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.

co-Sponsors

View additional co-sponsors

multi-Sponsors

View additional multi-sponsors

2009-A11005A (ACTIVE) - Details

See Senate Version of this Bill:: S7608
Current Committee:: Assembly Codes
Law Section:: General Business Law
Laws Affected:: Add §396-ii, Gen Bus L

2009-A11005A (ACTIVE) - Summary

Requires clear and conspicuous disclosure of the fees and restrictions prior to the sale of a prepaid debit card.

2009-A11005A (ACTIVE) - Bill Text download pdf

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

                                11005--A

                          I N  A S S E M B L Y

                               May 6, 2010
                               ___________

Introduced  by  M. of A. PHEFFER, CHRISTENSEN, BENEDETTO, STIRPE, GALEF,
  JAFFEE, NOLAN, ROSENTHAL, KOON, TITUS, FIELDS -- Multi-Sponsored by --
  M. of A.  BOYLAND, CRESPO, DESTITO, GIBSON, GLICK, GOTTFRIED,  HOOPER,
  JEFFRIES,  JOHN, KAVANAGH, MAGEE, MAYERSOHN, REILLY, ROBINSON, TOBACCO
  -- (at request of the Consumer Protection  Board)  --  read  once  and
  referred  to  the  Committee  on  Consumer  Affairs  and Protection --
  reported  and  referred  to  the  Committee  on  Codes  --   committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the general business law, in relation to general use
  prepaid cards

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

  Section 1. The general business law is amended by adding a new section
396-ii to read as follows:
  S  396-II. GENERAL USE OF PREPAID CARDS. 1.  DEFINITIONS. (A) "GENERAL
USE PREPAID CARD" MEANS A CARD OR OTHER PAYMENT CODE OR DEVICE ISSUED BY
ANY INDIVIDUAL, FIRM, COMPANY, PARTNERSHIP, LIMITED  LIABILITY  COMPANY,
CORPORATION  OR ENTITY THAT UPON PRESENTATION IS (I) REDEEMABLE AT UNAF-
FILIATED MERCHANTS OR SERVICE PROVIDERS, OR AUTOMATED  TELLER  MACHINES;
(II)  ISSUED  IN  A REQUESTED AMOUNT, WHETHER OR NOT THAT AMOUNT MAY, AT
THE OPTION OF THE ISSUER, BE RELOADED TO INCREASE ITS VALUE AT  A  LATER
PERIOD  IN  TIME; (III) PURCHASED OR LOADED ON A PREPAID BASIS; AND (IV)
HONORED BY MERCHANTS FOR GOODS AND SERVICES, OR (V) USED TO ACCESS  CASH
AT AN AUTOMATED TELLER MACHINE. SUCH TERM SHALL NOT INCLUDE AN ELECTRON-
IC  BENEFIT TRANSFER CARD ISSUED PURSUANT TO SECTION TWENTY-ONE-A OF THE
SOCIAL SERVICES LAW, OR A GIFT CERTIFICATE AS DEFINED IN  SECTION  THREE
HUNDRED NINETY-SIX-I OF THIS ARTICLE.
  (B)  "CLEAR  AND  CONSPICUOUS" OR "CLEARLY AND CONSPICUOUSLY" MEANS IN
LARGER TYPE THAN THE SURROUNDING TEXT, OR IN CONTRASTING TYPE, FONT,  OR
COLOR  TO  THE  SURROUNDING  TEXT  OF THE SAME SIZE, OR SET OFF FROM THE
SURROUNDING TEXT OF THE SAME SIZE BY SYMBOLS OR OTHER MARKS, IN A MANNER
THAT CLEARLY CALLS ATTENTION TO THE LANGUAGE. IN THE CASE  OF  AN  AUDIO
DISCLOSURE,  "CLEAR  AND  CONSPICUOUS"  AND  "CLEARLY AND CONSPICUOUSLY"
MEANS IN A VOLUME AND CADENCE  SUFFICIENT  TO  BE  READILY  AUDIBLE  AND
UNDERSTANDABLE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16092-06-0

A. 11005--A                         2

  2. PRIOR TO THE SALE OF A GENERAL USE PREPAID CARD, THE CONSUMER SHALL
RECEIVE CLEAR AND CONSPICUOUS DISCLOSURE THAT TERMS AND CONDITIONS APPLY
TO SUCH CARD. SUCH CLEAR AND CONSPICUOUS DISCLOSURE SHALL INCLUDE:
  (A)  NOTICE  ON  THE GENERAL USE PREPAID CARD STATING "IMPORTANT TERMS
AND CONDITIONS AFFECTING THE BALANCE APPLY";
  (B) NOTICE IN ALL  ADVERTISEMENTS,  SOLICITATIONS  OR  PROMOTIONS  FOR
GENERAL USE PREPAID CARDS, WHICH SHALL STATE "IMPORTANT TERMS AND CONDI-
TIONS AFFECTING THE BALANCE APPLY";
  (C) IN ANY WRITTEN OR VERBAL OFFER A STATEMENT THAT ADVISES "IMPORTANT
TERMS AND CONDITIONS AFFECTING THE BALANCE APPLY"; AND
  (D)  FOR  PURCHASES  VIA  ELECTRONIC,  COMPUTER,  OR TELEPHONIC MEANS,
NOTICE THAT "IMPORTANT TERMS AND CONDITIONS AFFECTING THE BALANCE APPLY"
SHALL BE PROVIDED PRIOR TO THE CUSTOMER'S PURCHASE OF  THE  GENERAL  USE
PREPAID CARD, OR WRITTEN NOTICE WITHIN THE ELECTRONIC MESSAGE OFFERING A
GENERAL USE PREPAID CARD FOR PURCHASE.
  3.  (A)  THE  FOLLOWING  TERMS AND CONDITIONS OF A GENERAL USE PREPAID
CARD SHALL BE CLEARLY AND CONSPICUOUSLY DISCLOSED PRIOR TO THE  SALE  OF
THE  GENERAL  USE  PREPAID  CARD: (I) THE EXPIRATION DATE; (II) ANY FEES
ASSESSED TO ACTIVATE OR INITIATE THE GENERAL USE PREPAID CARD; (III) ANY
FEES CHARGED AGAINST THE  BALANCE  OF  THE  GENERAL  USE  PREPAID  CARD,
INCLUDING  BUT  NOT  LIMITED  TO  MAINTENANCE FEES, MONTHLY FEES, ANNUAL
FEES, POINT OF SALE FEES, AUTOMATED  TELLER  MACHINE  TRANSACTION  FEES,
OUT-OF-NETWORK  AND  INTERNATIONAL AUTOMATED TELLER MACHINE FEES, TRANS-
ACTION LIMIT FEES, BILL PAYMENT FEES, PHONE OR ONLINE TRANSACTION  FEES,
MONEY  TRANSFER  FEES,  INACTIVITY  FEES, DISPUTE FEES, CUSTOMER SERVICE
CALL FEES, AND RELOAD FEES CHARGED BY THIRD PARTIES; (IV) ANY CONDITIONS
WHICH LIMIT A CONSUMER'S ABILITY TO ACCESS THE FULL VALUE OF  THE  MONEY
PLACED  ON  THE  GENERAL  USE  PREPAID  CARD;  (V) WHETHER A FEE WILL BE
CHARGED FOR THE REPLACEMENT OF A GENERAL USE PREPAID CARD THAT IS  LOST,
STOLEN,  OR DESTROYED; (VI) ANY POLICIES RELATED TO REFUNDS, WARRANTIES,
CHANGES IN TERMS AND CONDITION, ASSIGNMENT AND  WAIVER;  AND  (VII)  ANY
ADDITIONAL TERMS AND CONDITIONS.
  (B)  ANY  GENERAL  USE  PREPAID  CARD TERMS AND CONDITIONS PURSUANT TO
PARAGRAPH (A) OF THIS SUBDIVISION SHALL BE PROVIDED  EITHER  (I)  VIA  A
TOLL  FREE  TELEPHONE NUMBER, IF AN ACTIVE TOLL FREE TELEPHONE NUMBER IS
CLEARLY AND CONSPICUOUSLY PROVIDED ON AN ENVELOPE OR PACKAGING  CONTAIN-
ING THE GENERAL USE PREPAID CARD, ALONG WITH A NOTICE ADVISING CONSUMERS
THAT  SUCH NUMBER PROVIDES IMPORTANT INFORMATION FOR CONSUMERS TO ACCESS
THE COST OF THE CARD AND THE IMPORTANT TERMS AND CONDITIONS; OR (II)  ON
A  PRINTED  DOCUMENT ACCOMPANYING THE GENERAL USE PREPAID CARD, PROVIDED
THAT THE  CONSUMER  CAN  EASILY  REVIEW  SUCH  PRINTED  DOCUMENT  BEFORE
PURCHASING  THE  CARD,  AND  AN  ACTIVE  TOLL  FREE  TELEPHONE NUMBER IS
INCLUDED FOR THE CONSUMER TO ACCESS FURTHER INFORMATION.
  4. NO RETROACTIVE FEES SHALL BE ASSESSED AGAINST A GENERAL USE PREPAID
CARD.
  5. THE REQUIREMENTS OF SUBDIVISIONS TWO  AND  THREE  OF  THIS  SECTION
SHALL  NOT  APPLY  TO  A  GENERAL USE PREPAID CARD THAT HAS NO TERMS AND
CONDITIONS.
  6. NOTHING IN THIS SECTION SHALL BE  CONSTRUED  TO  PREVENT  UNCLAIMED
FUNDS RELATED TO GENERAL USE PREPAID CARDS FROM BECOMING ABANDONED UNDER
SECTION THIRTEEN HUNDRED FIFTEEN OF THE ABANDONED PROPERTY LAW.
  7. WHENEVER THERE SHALL BE A VIOLATION OF THIS SECTION, AN APPLICATION
MAY  BE  MADE  BY  THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE
STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURISDICTION BY A SPECIAL
PROCEEDING TO ISSUE AN INJUNCTION, AND UPON NOTICE TO THE  DEFENDANT  OF
NOT  LESS THAN FIVE DAYS, TO ENJOIN AND RESTRAIN THE CONTINUANCE OF SUCH

A. 11005--A                         3

VIOLATIONS; AND IF IT SHALL APPEAR TO THE SATISFACTION OF THE  COURT  OR
JUSTICE  THAT  THE  DEFENDANT  HAS,  IN FACT, VIOLATED THIS SECTION, AND
INJUNCTION MAY BE  ISSUED  BY  SUCH  COURT  OR  JUSTICE,  ENJOINING  AND
RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT  REQUIRING PROOF THAT ANY
PERSON HAS, IN FACT, BEEN  INJURED  OR  DAMAGED  THEREBY.  IN  ANY  SUCH
PROCEEDING,  THE  COURT  MAY  MAKE ALLOWANCES TO THE ATTORNEY GENERAL AS
PROVIDED IN PARAGRAPH SIX OF SUBDIVISION  (A)  OF  SECTION  EIGHTY-THREE
HUNDRED  THREE  OF  THE CIVIL PRACTICE LAW AND RULES AND DIRECT RESTITU-
TION. WHENEVER THE COURT  SHALL  DETERMINE  THAT  A  VIOLATION  OF  THIS
SECTION  HAS  OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF NOT MORE
THAN ONE THOUSAND DOLLARS FOR EACH VIOLATION.  IN  CONNECTION  WITH  ANY
SUCH  APPLICATION,  THE ATTORNEY GENERAL IS AUTHORIZED TO TAKE PROOF AND
MAKE A DETERMINATION OF THE RELEVANT FACTS AND  TO  ISSUE  SUBPOENAS  IN
ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
  8. THE PROVISIONS OF THIS SECTION SHALL BE EXCLUSIVE AND SHALL PREEMPT
ANY  PROVISIONS  OF  LOCAL LAW, ORDINANCE OR CODE, AND NO LOCALITY SHALL
IMPOSE REQUIREMENTS THAT ARE INCONSISTENT WITH OR MORE RESTRICTIVE  THAN
THOSE SET FORTH IN THIS SECTION.
  S  2.  Subdivision  1 of section 396-i of the general business law, as
amended by chapter 170 of the laws  of  2004,  is  amended  to  read  as
follows:
  1.  For  the purposes of this section, "gift certificate" shall mean a
written promise or electronic payment device that: (i) is  usable  at  a
single  merchant or an affiliated group of merchants that share the same
name, mark, or logo, or is usable at multiple, unaffiliated merchants or
service providers; and (ii) is issued in a specified amount;  and  (iii)
may  or may not be increased in value or reloaded; and (iv) is purchased
and/or loaded on a prepaid basis for the future purchase or delivery  of
any  goods  or  services;  and  (v)  is  honored upon presentation. Gift
certificate shall not include an electronic payment device linked  to  a
deposit  account,  GENERAL  USE PREPAID CARD AS DEFINED IN SECTION THREE
HUNDRED NINETY-SIX-II OF THIS  ARTICLE,  or  prepaid  telephone  calling
cards  regulated  under  section ninety-two-f of the public service law.
Gift certificate also shall not include flexible  spending  arrangements
as  defined in Section 106(c)(2) of the Internal Revenue Code, 26 U.S.C.
S 106(c)(2); flexible spending accounts subject to Section  125  of  the
Internal  Revenue  Code,  26  U.S.C.  S  125;  Archer MSAs as defined in
Section 220(d) of the Internal Revenue Code, 26 U.S.C. S 220(d); depend-
ent care reimbursement accounts subject to Section 129 of  the  Internal
Revenue  Code,  26  U.S.C.  S  129;  health  savings accounts subject to
Section 223(d) of the Internal Revenue Code,  26  U.S.C.  S  223(d),  as
amended  by Section 1201 of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, Pub. L.  No. 108-173; or similar accounts
from which, under the Internal Revenue Code and its  implementing  regu-
lations,  individuals  may  pay  medical expenses, health care expenses,
dependent care expenses, or similar expenses on  a  pretax  basis.  Gift
certificate  also  shall  not include a prepaid discount card or program
used to purchase identified goods or services at a price  or  percentage
below  the normal and customary price; provided that the expiration date
of the prepaid discount card or program  is  clearly  and  conspicuously
disclosed.  Gift  certificate  also  shall  not include payroll cards or
other electronic payment devices which are linked to a  deposit  account
and which are given in exchange for goods or services rendered.
  S  3. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

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Assembly Bill A11005

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Sponsored By

PHEFFER

Archive: Last Bill Status - In Assembly Committee

Bill Amendments

co-Sponsors

Joan Christensen

Michael Benedetto

Albert A. Stirpe

Sandy Galef

multi-Sponsors

William Boyland

Marcos Crespo

RoAnn Destito

Vanessa Gibson

2009-A11005 - Details

2009-A11005 - Summary

2009-A11005 - Sponsor Memo

2009-A11005 - Bill Text download pdf

co-Sponsors

Joan Christensen

Michael Benedetto

Albert A. Stirpe

Sandy Galef

multi-Sponsors

William Boyland

Marcos Crespo

RoAnn Destito

Vanessa Gibson

2009-A11005A (ACTIVE) - Details

2009-A11005A (ACTIVE) - Summary

2009-A11005A (ACTIVE) - Bill Text download pdf

Comments