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

                                  4412

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            February 3, 2011
                               ___________

Introduced  by  M.  of  A.  P. RIVERA  -- Multi-Sponsored by -- M. of A.
  JAFFEE -- read once and referred to the Committee on Consumer  Affairs
  and Protection

AN  ACT  to amend the public service law, the abandoned property law and
  the general business law, in relation  to  prepaid  telephone  calling
  cards  and  services; and to repeal section 92-f of the public service
  law relating to prepaid telephone calling card consumer protections

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

  Section 1. Section 92-f of the public service law is REPEALED.
  S  2. The public service law is amended by adding a new article 5-A to
read as follows:
                               ARTICLE 5-A
                     PREPAID TELEPHONE CALLING CARDS
SECTION 103.   DEFINITIONS.
        103-A. CERTIFICATION.
        103-B. DISCLOSURE REQUIREMENTS.
        103-C. CUSTOMER SERVICE.
        103-D. ENFORCEMENT.
  S 103. DEFINITIONS. FOR THE  PURPOSES  OF  THIS  ARTICLE,  UNLESS  THE
CONTEXT  OR SUBJECT MATTER OTHERWISE REQUIRES, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  1. "ADVERTISEMENT" MEANS  THE  ATTEMPT,  DIRECTLY  OR  INDIRECTLY,  BY
PUBLICATION, DISSEMINATION, SOLICITATION, ENDORSEMENT OR CIRCULATION, OR
IN  ANY  OTHER  WAY,  TO  INDUCE  DIRECTLY  OR  INDIRECTLY ANY PERSON TO
PURCHASE A PREPAID CARD OR PREPAID SERVICE,  WHETHER  APPEARING  IN  ANY
NEWSPAPER,  MAGAZINE,  PERIODICAL,  CIRCULAR,  IN-STORE  OR OUT-OF-STORE
SIGN, OR OTHER WRITTEN  MATTER PLACED BEFORE THE CONSUMING PUBLIC, OR IN
ANY RADIO BROADCAST, TELEVISION BROADCAST, ELECTRONIC MEDIUM, OR  DELIV-
ERED TO OR THROUGH ANY COMPUTER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00022-01-1

              

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  2.  "PERSON" MEANS AND INCLUDES ANY CORPORATION, COMPANY, ASSOCIATION,
FIRM, ENTITY, PARTNERSHIP OR INDIVIDUAL.
  3. "PREPAID CARD" MEANS ANY OBJECT OR RIGHT OF USE PURCHASED FOR A SUM
CERTAIN THAT ENABLES A CONSUMER TO USE A PREPAID SERVICE. SUCH RIGHTS OF
USE  MAY  BE  EMBODIED  ON  A  CARD  OR  OTHER PHYSICAL OBJECT OR MAY BE
PURCHASED BY AN  ELECTRONIC  OR  TELEPHONIC  MEANS  WITHOUT  A  PHYSICAL
OBJECT. THE TERM "PREPAID CARD" SHALL NOT INCLUDE:
  (A)  PREPAID  CARDS  THAT  ARE  PROVIDED  FOR FREE OR AT NO ADDITIONAL
CHARGE AS A PROMOTIONAL ITEM ACCOMPANYING  ANOTHER  PRODUCT  OR  SERVICE
PURCHASED BY A CONSUMER;
  (B)  PREPAID  CARDS  PROVIDED PURSUANT TO AN AWARDS, LOYALTY OR REBATE
PROGRAM WITHOUT ANY SEPARATE MONETARY CONSIDERATION BEING GIVEN  BY  THE
CONSUMER FOR THE PREPAID CARD; OR
  (C) AN OBJECT OR RIGHT OF USE THAT PROVIDES ACCESS TO A WIRELESS TELE-
COMMUNICATIONS SERVICE (WHETHER PRE OR POST PAID).
  4.  "PREPAID  DISTRIBUTOR"  MEANS  (A)  ANY  PERSON  THAT PURCHASES OR
RECEIVES PREPAID CARDS OR PREPAID SERVICE FROM  A  PREPAID  PROVIDER,  A
TELECOMMUNICATIONS  CARRIER  OR  OTHER PREPAID DISTRIBUTOR, AND SELLS OR
DISTRIBUTES THE PREPAID CARDS AND/OR PREPAID  SERVICE  TO  ONE  OR  MORE
PREPAID  DISTRIBUTORS  OR  TO ONE OR MORE PREPAID RETAILERS; AND (B) ANY
PERSON THAT OTHERWISE ACTIVELY ENGAGES IN THE PROMOTION, ADVERTISING  OR
DISSEMINATION  OF  PREPAID CARDS OR PREPAID SERVICE AND IS NOT A PREPAID
PROVIDER. SUCH TERM SHALL  NOT  INCLUDE  ANY  PREPAID  RETAILER  ENGAGED
EXCLUSIVELY IN POINT-OF-SALE TRANSACTIONS WITH CONSUMERS.
  5.  "PREPAID  PROVIDER"  MEANS ANY PERSON THAT IS ENGAGED IN PROVIDING
PREPAID SERVICE TO THE PUBLIC USING ITS OWN, A RESOLD TELECOMMUNICATIONS
NETWORK, OR VOICE OVER INTERNET TECHNOLOGY.
  6. "PREPAID RETAILER" MEANS ANY PERSON THAT SELLS OR  OFFERS  TO  SELL
PREPAID CARDS OR PREPAID SERVICE DIRECTLY TO ONE OR MORE CONSUMERS.
  7.  "PREPAID  SERVICE"  MEANS  ANY TELECOMMUNICATIONS SERVICE THAT (A)
MUST BE PAID FOR IN ADVANCE BY A CONSUMER AND (B) ENABLES  THE  CONSUMER
TO  ORIGINATE  TELEPHONE CALLS BY USING AN ACCESS NUMBER AND AN AUTHORI-
ZATION  CODE,  WHETHER  MANUALLY  OR  ELECTRONICALLY  DIALED.  THE  TERM
"PREPAID  SERVICE" SHALL NOT INCLUDE ANY SERVICE THAT PROVIDES ACCESS TO
A WIRELESS TELECOMMUNICATIONS SERVICE (WHETHER PRE OR POST PAID).
  8. "PROVIDER CERTIFICATE" MEANS A PROVIDER CERTIFICATE ISSUED  BY  THE
COMMISSION  TO A PREPAID PROVIDER PURSUANT TO SUBDIVISION ONE OF SECTION
ONE HUNDRED THREE-A OF THIS ARTICLE.
  S 103-A. CERTIFICATION. 1. PREPAID PROVIDERS. (A) GENERAL. IT SHALL BE
UNLAWFUL FOR ANY PREPAID PROVIDER TO OFFER, PROVIDE OR SEEK TO OFFER  OR
PROVIDE  PREPAID  SERVICE  IN THIS STATE UNLESS THE PREPAID PROVIDER HAS
APPLIED FOR AND RECEIVED A PROVIDER CERTIFICATE FROM THE COMMISSION.
  (B) APPLICATION. APPLICATION FOR A PROVIDER CERTIFICATE SHALL BE ON  A
FORM  PROVIDED BY THE COMMISSION IN ACCORDANCE WITH THIS SUBDIVISION AND
SHALL BE ACCOMPANIED BY A FEE IN THE AMOUNT OF FIVE HUNDRED DOLLARS. THE
APPLICATION FOR A PROVIDER CERTIFICATE SHALL CONTAIN ANY INFORMATION THE
COMMISSION MAY REQUIRE, BUT SHALL INCLUDE AT A MINIMUM:
  (I) THE NAME, ADDRESS AND TITLE OF EACH OFFICER,  DIRECTOR,  EXECUTIVE
AND PARTNER OF THE PREPAID PROVIDER;
  (II)  A DESCRIPTION OF THE PREPAID SERVICES AND PREPAID CARDS THAT THE
PREPAID PROVIDER INTENDS TO OFFER;
  (III) THE PREPAID PROVIDER'S TWENTY-FOUR HOUR CUSTOMER  SERVICE  TELE-
PHONE NUMBER FOR CONSUMERS WITHIN THIS STATE; AND
  (IV)  THE  NAME AND ADDRESS OF THE PREPAID PROVIDER'S REGISTERED AGENT
FOR SERVICE OF PROCESS IN THIS STATE.

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  (C) APPROVAL BY COMMISSION. THE COMMISSION SHALL APPROVE  AN  APPLICA-
TION  FOR  A  PROVIDER CERTIFICATE UPON A SHOWING BY THE APPLICANT AND A
FINDING BY THE COMMISSION THAT THE APPLICANT POSSESSES SUFFICIENT  TECH-
NICAL,  FINANCIAL  AND  MANAGERIAL  RESOURCES  AND  ABILITIES TO PROVIDE
PREPAID  SERVICE.  THE  COMMISSION  SHALL  APPROVE  AN APPLICATION FOR A
PROVIDER CERTIFICATE UPON A SHOWING BY AN APPLICANT THAT THE  COMMISSION
HAS ISSUED AN APPROPRIATE CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSI-
TY  TO  THE  APPLICANT  OR  THE TELECOMMUNICATIONS SERVICE CARRIER WHOSE
SERVICE THE APPLICANT IS SEEKING TO RESELL, PROVIDED THAT THE  APPLICANT
OR  TELECOMMUNICATIONS  SERVICE  CARRIER (AS THE CASE MAY BE) REMAINS IN
GOOD STANDING WITH THE COMMISSION. THE COMMISSION SHALL ALSO REQUIRE  AS
A  CONDITION  OF  APPROVAL  THE  PROCUREMENT  OF A SURETY BOND, OR OTHER
AUTHORIZED SECURITY, FROM THE PREPAID PROVIDER IN THE MINIMUM AMOUNT  OF
FIFTY THOUSAND DOLLARS.  THE COMMISSION MAY REQUIRE A LARGER SURETY BOND
IF  IT  DETERMINES  THAT  A PREPAID PROVIDER HAS ENGAGED IN A PATTERN OF
CONDUCT RESULTING IN BONA FIDE CONSUMER  COMPLAINTS  OF  MISCONDUCT  AND
THAT  SUCH  INCREASED BOND IS NECESSARY FOR THE PROTECTION OF CONSUMERS.
EACH APPROVED PREPAID PROVIDER SHALL RECEIVE A CERTIFICATE  NUMBER  FROM
THE COMMISSION.
  (D)  POSTING  BY  COMMISSION. THE COMMISSION SHALL POST ON THE COMMIS-
SION'S WEBSITE, ON A LINK SOLELY DEDICATED TO PREPAID PROVIDERS, A  LIST
THAT  CONTAINS  THE  FULL  LEGAL  NAME OF EACH PREPAID PROVIDER THAT HAS
RECEIVED A PROVIDER CERTIFICATE AND THE CUSTOMER SERVICE NUMBER FOR EACH
SUCH PREPAID PROVIDER.
  (E) NOTIFICATION TO  PREPAID  DISTRIBUTORS.  PREPAID  PROVIDERS  SHALL
SUPPLY  PROOF  OF THEIR PROVIDER CERTIFICATE TO EACH PREPAID DISTRIBUTOR
IN THIS STATE TO WHOM THE  PREPAID  PROVIDER  PROVIDES  PREPAID  SERVICE
AND/OR PREPAID CARDS.
  2.  PREPAID  DISTRIBUTORS.  (A)  GENERAL. IT SHALL BE UNLAWFUL FOR ANY
PREPAID DISTRIBUTOR TO DISTRIBUTE, SELL OR RESELL PREPAID  CARDS  AND/OR
PREPAID  SERVICE  IN THIS STATE UNLESS IT IS REGISTERED WITH THE COMMIS-
SION IN ACCORDANCE WITH THE PROVISIONS OF THIS SUBDIVISION.
  (B) APPLICATION. APPLICATION FOR A PREPAID DISTRIBUTOR SHALL BE  ON  A
FORM  PROVIDED BY THE COMMISSION IN ACCORDANCE WITH THIS SUBDIVISION AND
SHALL BE ACCOMPANIED BY A FEE IN THE AMOUNT OF  THREE  HUNDRED  DOLLARS.
THE  APPLICATION  SHALL  CONTAIN  ANY  INFORMATION  THE  COMMISSION  MAY
REQUIRE, BUT SHALL INCLUDE AT A MINIMUM:
  (I) THE NAME, ADDRESS AND TITLE OF EACH OFFICER,  DIRECTOR,  EXECUTIVE
AND PARTNER OF THE PREPAID DISTRIBUTOR;
  (II)  A DESCRIPTION OF THE PREPAID SERVICES AND PREPAID CARDS THAT THE
PREPAID DISTRIBUTOR INTENDS TO DISTRIBUTE, SELL, RESELL OR OFFER; AND
  (III) THE NAME AND ADDRESS OF  THE  PREPAID  DISTRIBUTOR'S  REGISTERED
AGENT FOR SERVICE OF PROCESS IN THIS STATE.
  (C)  APPROVAL  BY COMMISSION. THE COMMISSION SHALL APPROVE AN APPLICA-
TION OF A PREPAID DISTRIBUTOR UPON A SHOWING  BY  THE  APPLICANT  AND  A
FINDING  BY THE COMMISSION THAT THE APPLICANT POSSESSES SUFFICIENT TECH-
NICAL, FINANCIAL, AND MANAGERIAL RESOURCES AND ABILITIES  TO  DISTRIBUTE
PREPAID  CARDS AND/OR PREPAID SERVICE. THE COMMISSION SHALL ALSO REQUIRE
AS A CONDITION OF APPROVAL THE PROCUREMENT OF A SURETY  BOND,  OR  OTHER
AUTHORIZED  SECURITY, FROM THE PREPAID DISTRIBUTOR IN THE MINIMUM AMOUNT
OF TEN THOUSAND DOLLARS. IF THE ANNUAL SALES OF THE PREPAID  DISTRIBUTOR
IN  THIS  STATE  EXCEED  ONE  MILLION DOLLARS, THE MINIMUM AMOUNT OF THE
SURETY BOND, OR OTHER AUTHORIZED SECURITY, SHALL BE TWENTY-FIVE THOUSAND
DOLLARS. EACH APPROVED PREPAID DISTRIBUTOR SHALL RECEIVE A  REGISTRATION
NUMBER FROM THE COMMISSION.

A. 4412                             4

  (D)  NOTIFICATION.  PREPAID  DISTRIBUTORS  SHALL SUPPLY PROOF OF THEIR
REGISTRATION WITH THE COMMISSION  TO  EACH  PREPAID  RETAILER  OR  OTHER
PREPAID DISTRIBUTOR IN THIS STATE TO WHOM THE PREPAID DISTRIBUTOR SELLS,
PROVIDES  OR  DISTRIBUTES  PREPAID  CARDS.  PREPAID  DISTRIBUTORS  SHALL
FORWARD  THE  PROOF  SUPPLIED  BY  EACH PREPAID PROVIDER OF SUCH PREPAID
PROVIDER'S CERTIFICATION WITH THE COMMISSION TO EACH PREPAID RETAILER OR
OTHER PREPAID DISTRIBUTOR IN THIS STATE TO WHOM THE PREPAID  DISTRIBUTOR
SELLS, PROVIDES OR DISTRIBUTES PREPAID CARDS.
  3. PREPAID RETAILERS. (A) IT SHALL BE UNLAWFUL FOR ANY PREPAID RETAIL-
ER  TO  SELL  OR  OFFER  TO SELL PREPAID CARDS OR PREPAID SERVICE TO ANY
CONSUMER IN THIS STATE UNLESS THE PREPAID RETAILER HAS RECEIVED PROOF OF
THE PROVIDER CERTIFICATE FOR EACH APPLICABLE PREPAID  CARD  AND  PREPAID
SERVICE OFFERED BY THE PREPAID RETAILER.
  (B) IT SHALL BE UNLAWFUL FOR ANY PREPAID RETAILER TO PURCHASE OR OFFER
TO  PURCHASE PREPAID CARDS OR PREPAID SERVICE FROM ANY PREPAID DISTRIBU-
TOR UNLESS THE PREPAID  RETAILER  HAS  RECEIVED  PROOF  OF  THE  PREPAID
DISTRIBUTOR'S REGISTRATION WITH THE COMMISSION.
  (C)  PREPAID  RETAILERS  SHALL  NOT SELL OR OFFER FOR SALE ANY PREPAID
CARD THAT THE PREPAID RETAILER KNOWS PROVIDES  FEWER  MINUTES  THAN  THE
NUMBER  OF MINUTES PROMOTED OR ADVERTISED FOR SUCH PREPAID CARD, INCLUD-
ING THE NUMBER OF MINUTES LISTED ON THE PREPAID CARD, ANY ADVERTISING OR
POINT-OF-SALE MATERIAL RELATED TO THE PREPAID CARD OR ANY  VOICE  PROMPT
ANNOUNCING  THE  NUMBER OF MINUTES AVAILABLE FOR A CALL WITH THE PREPAID
CARD.
  (D) PREPAID RETAILERS SHALL POST THE  COMMISSION'S  TOLL-FREE  HOTLINE
TELEPHONE NUMBER IN A CONSPICUOUS LOCATION WITHIN EACH STORE.
  4.  AMENDMENTS.  EACH  PREPAID  PROVIDER AND PREPAID DISTRIBUTOR SHALL
FILE AN AMENDED APPLICATION WITHIN TWENTY DAYS AFTER ANY CHANGE  IN  THE
INFORMATION CONTAINED IN THEIR APPLICATION. NO FEE SHALL BE REQUIRED FOR
THE FILING OF AN AMENDMENT.
  5.  REVOCATION.  THE COMMISSION MAY, IN ITS DISCRETION, CANCEL, REVOKE
OR SUSPEND THE CERTIFICATE AND/OR REGISTRATION OF ANY  PREPAID  PROVIDER
OR PREPAID DISTRIBUTOR UPON ANY OF THE FOLLOWING GROUNDS:
  (A)  THE  PREPAID  PROVIDER OR PREPAID DISTRIBUTOR DOES NOT PROVIDE OR
UPDATE THE INFORMATION REQUIRED BY THIS SECTION;
  (B) THE PREPAID PROVIDER OR PREPAID DISTRIBUTOR FAILS  TO  PROVIDE  OR
MAINTAIN THE REQUIRED SURETY BOND OR OTHER AUTHORIZED SECURITY;
  (C)  THE  PREPAID  PROVIDER OR PREPAID DISTRIBUTOR VIOLATES ANY ORDER,
DECISION, RULE, REGULATION OR REQUIREMENT ESTABLISHED OR ADOPTED BY  THE
COMMISSION PURSUANT TO THIS ARTICLE;
  (D)  THE  PREPAID PROVIDER OR PREPAID DISTRIBUTOR FILES A FALSE STATE-
MENT WITH THE COMMISSION; OR
  (E) THE PREPAID PROVIDER OR PREPAID DISTRIBUTOR VIOLATES ANY PROVISION
OF LAW.
  6. OTHER REGISTRATIONS. THE CERTIFICATION  AND  REGISTRATION  REQUIRE-
MENTS  OF  THIS SECTION SHALL BE IN ADDITION TO, AND DO NOT OBVIATE, ANY
CERTIFICATION, AUTHORIZATION, REGISTRATION OR OTHER REGULATORY  REQUIRE-
MENTS IMPOSED ON INTRASTATE TELECOMMUNICATIONS CARRIERS BY THE STATE.
  S  103-B. DISCLOSURE REQUIREMENTS. 1. PREPAID CARDS. PREPAID PROVIDERS
AND PREPAID DISTRIBUTORS SHALL CLEARLY AND  CONSPICUOUSLY  DISCLOSE  THE
FOLLOWING INFORMATION ON ALL PREPAID CARDS:
  (A)  THE  NAME  OF THE PREPAID PROVIDER AS CERTIFICATED BY THE COMMIS-
SION;
  (B) THE PREPAID PROVIDER'S TWENTY-FOUR-HOUR CUSTOMER SERVICE TELEPHONE
NUMBER;
  (C) AN ACCESS NUMBER, IF REQUIRED TO ACCESS THE PREPAID SERVICE;

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  (D) AN AUTHORIZATION CODE, IF REQUIRED TO ACCESS THE PREPAID  SERVICE;
AND
  (E) ANY EXPIRATION DATE OR POLICY.
  2. PREPAID CARDS OR PACKAGING. PREPAID PROVIDERS AND PREPAID DISTRIBU-
TORS  SHALL  CLEARLY  AND  CONSPICUOUSLY DISCLOSE ALL MATERIAL TERMS AND
CONDITIONS FOR USE OF A PREPAID CARD OR PREPAID SERVICE  EITHER  ON  THE
PREPAID CARD OR ITS PACKAGING, WHICH TERMS AND CONDITIONS SHALL BE VISI-
BLE  TO  THE  CONSUMER PRIOR TO PURCHASE AT THE POINT OF SALE, INCLUDING
WITHOUT LIMITATION THE FOLLOWING ITEMS:
  (A) THE MAXIMUM AMOUNT AND  FREQUENCY  OF  ANY  CHARGE,  FEE,  TAX  OR
SURCHARGE  (EXCLUDING THE APPLICABLE PER MINUTE RATE) THAT MAY BE APPLI-
CABLE TO THE USE OF THE PREPAID CARD OR PREPAID SERVICE FOR CALLS ORIGI-
NATING WITHIN THE UNITED STATES;
  (B) NOTICE THAT ADDITIONAL OR DIFFERENT  PER  MINUTE  RATES,  CHARGES,
FEES,  TAXES  OR  SURCHARGES  MAY  APPLY  TO  USE OF THE PREPAID CARD OR
PREPAID SERVICE FOR CALLS ORIGINATING OUTSIDE THE UNITED  STATES  AND/OR
FOR CALLS TO INTERNATIONAL CELLULAR AND WIRELESS TELEPHONE NUMBERS;
  (C)  NOTICE  THAT  PER  MINUTE  RATES MAY BE HIGHER FOR CALLS MADE VIA
TOLL-FREE ACCESS NUMBERS;
  (D) THE VALUE OF THE PREPAID CARD OR PREPAID SERVICE,  IN  DOLLARS  OR
MINUTES;
  (E) ANY MINIMUM CHARGE PER CALL; AND
  (F)  ANY  APPLICABLE  POLICIES RELATING TO REFUND, RECHARGE, DECREMENT
AND EXPIRATION.
  3. POINT-OF-SALE MATERIALS (OTHER THAN PREPAID CARDS  AND  PACKAGING).
PREPAID  PROVIDERS  AND PREPAID DISTRIBUTORS SHALL CLEARLY AND CONSPICU-
OUSLY DISCLOSE THE INFORMATION REQUIRED BY SUBDIVISIONS ONE AND  TWO  OF
THIS  SECTION  ON  ALL  POINT-OF-SALE  MATERIALS  (WHICH  TERM SHALL NOT
INCLUDE THE PREPAID CARDS THEMSELVES AND THEIR  PACKAGING)  REGARDING  A
PREPAID  SERVICE.  ALL  POINT-OF-SALE  MATERIALS  (WHICH  TERM SHALL NOT
INCLUDE THE PREPAID CARDS THEMSELVES AND THEIR  PACKAGING)  REGARDING  A
PREPAID SERVICE SHALL CLEARLY AND CONSPICUOUSLY DISPLAY THE COMMISSION'S
TOLL-FREE HOTLINE TELEPHONE NUMBER.
  4.   ADVERTISEMENTS  (OTHER  THAN  POINT-OF-SALE  MATERIALS).  PREPAID
PROVIDERS AND  PREPAID  DISTRIBUTORS  SHALL  CLEARLY  AND  CONSPICUOUSLY
DISCLOSE  THE  FOLLOWING INFORMATION ON ALL ADVERTISEMENTS FOR A PREPAID
CARD OR PREPAID SERVICE (OTHER THAN POINT-OF-SALE MATERIALS):
  (A) THE NAME OF THE PREPAID PROVIDER AS CERTIFICATED  BY  THE  COMMIS-
SION;
  (B) THE PREPAID PROVIDER'S TWENTY-FOUR-HOUR CUSTOMER SERVICE TELEPHONE
NUMBER; AND
  (C) ANY EXPIRATION DATE OR POLICY.
  5.  ADVERTISEMENTS  OF  MINUTES AND/OR RATES. ALL MINUTES AND/OR RATES
PROMOTED OR ADVERTISED ON A PREPAID  CARD,  ANY  POINT-OF-SALE  MATERIAL
RELATING  TO  THAT  PREPAID  CARD, ANY ADVERTISEMENT REGARDING A PREPAID
SERVICE, OR OTHERWISE RELATING TO ANY PREPAID SERVICE, SHALL  BE  AVAIL-
ABLE  AND  ACHIEVABLE BY THE CONSUMER, AND THERE SHALL BE NO LIMITATIONS
ON THE PERIOD OF TIME FOR  WHICH  THE  PROMOTED  OR  ADVERTISED  MINUTES
AND/OR  RATES WILL BE AVAILABLE TO THE CONSUMER UNLESS THOSE LIMITATIONS
ARE CLEARLY AND CONSPICUOUSLY DISCLOSED IN THE SAME LOCATION  WHERE  THE
MINUTES AND/OR RATES ARE LISTED.
  6. VOICE PROMPTS. ALL MINUTES ANNOUNCED ON ANY VOICE PROMPT GIVEN TO A
CONSUMER  AT  THE TIME THE CONSUMER PLACES A CALL WITH A PREPAID SERVICE
SHALL BE IMMEDIATELY AVAILABLE AND ACHIEVABLE BY THE  CONSUMER  ON  THAT
CALL.  ALL  PREPAID PROVIDERS SHALL GIVE A VOICE PROMPT TO A CONSUMER AT
THE TIME THE  CONSUMER  PLACES  A  CALL  WITH  A  PREPAID  SERVICE  THAT

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ANNOUNCES THE NUMBER OF MINUTES AVAILABLE FOR THAT CALL, WHICH NUMBER OF
MINUTES  SHALL  BE  INCLUSIVE  OF THE APPLICABLE PER MINUTE RATE AND ALL
APPLICABLE CHARGES, FEES, TAXES OR SURCHARGES.
  7.  PERMITTED  CHARGES.  A PREPAID PROVIDER SHALL NOT CHARGE, APPLY OR
DEDUCT  FROM  A  PREPAID  CARD'S  BALANCE  ANY  CHARGES,  FEES,   TAXES,
SURCHARGES OR OTHER AMOUNTS FOR USE OF THE PREPAID SERVICE EXCEPT:
  (A)  THE PER MINUTE RATE FOR EACH PARTICULAR DESTINATION CALLED BY THE
CONSUMER;
  (B) CHARGES, FEES, TAXES AND SURCHARGES THAT  ARE  PROPERLY  DISCLOSED
PURSUANT TO THIS SECTION; AND
  (C)  ANY  PER  MINUTE  RATE,  CHARGE,  FEE, TAX OR SURCHARGE PERMITTED
PURSUANT TO PARAGRAPHS (B) AND (C) OF SUBDIVISION TWO OF THIS SECTION. A
CONSUMER SHALL NOT BE CHARGED FOR ANY BUSY SIGNAL OR UNANSWERED CALL.  A
PREPAID  PROVIDER  SHALL  NOT  IMPOSE  ANY  FEE OR SURCHARGE THAT IS NOT
DISCLOSED AS REQUIRED  BY  THIS  SECTION  OR  THAT  EXCEEDS  THE  AMOUNT
DISCLOSED.  THE  AMOUNT  OF  ANY  CHARGE,  FEE, TAX OR SURCHARGE THAT IS
IMPOSED, ASSESSED OR DEDUCTED FROM A PREPAID  CARD'S  VALUE  OR  BALANCE
SHALL  BE  EXPRESSED AND DISCLOSED IN THE SAME FORMAT, EITHER DOLLARS OR
MINUTES, AS THE VALUE OF THE PREPAID CARD.
  8.  FOREIGN LANGUAGE. IF A PREPAID CARD OR ANY POINT-OF-SALE  MATERIAL
FOR  A  PREPAID  CARD  OR  PREPAID SERVICE IS PREDOMINANTLY WRITTEN IN A
LANGUAGE OTHER THAN ENGLISH,  THEN  THE  DISCLOSURES  REQUIRED  BY  THIS
SECTION  SHALL  BE  DISCLOSED  IN  THAT OTHER LANGUAGE ON THE APPLICABLE
PREPAID CARD OR POINT-OF-SALE MATERIAL.
  9. PAYPHONE SURCHARGE. A PREPAID PROVIDER MAY PROVIDE A  VOICE  PROMPT
NOTIFICATION  OF  ANY APPLICABLE PAYPHONE SURCHARGE FOR USE OF A PREPAID
SERVICE FROM A PAYPHONE IN LIEU OF PROVIDING NOTICE OF SUCH SURCHARGE AS
REQUIRED BY THIS SECTION.
  10. INTERNET  SALES.  NOTWITHSTANDING  ANY  OTHER  PROVISION  OF  THIS
SECTION,  IN  THE CASE OF A PREPAID CARD THAT CONSUMERS PURCHASE VIA THE
INTERNET, THE DISCLOSURES REQUIRED BY SUBDIVISIONS ONE AND TWO  OF  THIS
SECTION  SHALL  BE  DISCLOSED  CLEARLY AND CONSPICUOUSLY ON THE INTERNET
SITE THAT THE CONSUMER MUST ACCESS PRIOR TO PURCHASING THE PREPAID CARD.
  S 103-C.  CUSTOMER  SERVICE.  1.  GENERAL  REQUIREMENTS.  ALL  PREPAID
PROVIDERS  SHALL  ESTABLISH  AND  MAINTAIN  A TOLL-FREE CUSTOMER SERVICE
TELEPHONE NUMBER. PREPAID PROVIDERS SHALL PROVIDE CUSTOMER SERVICE TWEN-
TY-FOUR HOURS A DAY, SEVEN DAYS A WEEK. CUSTOMER SERVICE MAY BE PROVIDED
BY A COMBINATION OF LIVE OPERATOR, INTERACTIVE VOICE RESPONSE, AND ELEC-
TRONIC VOICE RECORDING OF CUSTOMER INQUIRIES AND COMPLAINTS.  LIVE OPER-
ATOR SERVICE SHALL BE AVAILABLE AT A MINIMUM FROM 9:00 A.M. TO 9:00 P.M.
IF AN ELECTRONIC VOICE RECORDER IS  USED,  THE  PREPAID  PROVIDER  SHALL
ATTEMPT TO CONTACT THE CONSUMER NO LATER THAN THE NEXT DAY FOLLOWING THE
DATE OF THE RECORDING.
  2.  SPECIFIC REQUIREMENTS.  CUSTOMER SERVICE MUST ENABLE A CONSUMER TO
ACCURATELY AND CLEARLY OBTAIN ALL  APPLICABLE  INFORMATION  REGARDING  A
PREPAID CARD OR PREPAID SERVICE, INCLUDING:
  (A) A DESCRIPTION OF ALL APPLICABLE FEES AND SURCHARGES;
  (B) SPECIFIC PER MINUTE RATES TO SPECIFIC DESTINATIONS;
  (C) BALANCE REMAINING; AND
  (D) MINUTES AVAILABLE AND REMAINING FOR USE IN A SINGLE, UNINTERRUPTED
CALL TO A SINGLE, REQUESTED DESTINATION.
  3.  REFUNDS. A PREPAID PROVIDER SHALL PROVIDE A REFUND TO ANY CONSUMER
WHO PURCHASES A PREPAID CARD IF THE TELECOMMUNICATION  NETWORK  SERVICES
ASSOCIATED  WITH  THE  PREPAID SERVICE FAIL TO OPERATE IN A COMMERCIALLY
REASONABLE MANNER. THE REFUND SHALL BE IN AN AMOUNT NOT  LESS  THAN  THE
VALUE  REMAINING  ON  THE PREPAID CARD AT THE TIME OF THE FAILURE AND IN

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THE FORM OF EITHER A REPLACEMENT PREPAID CARD OR BY  ADDING  THE  REFUND
AMOUNT  TO  THE  PREPAID  CARD'S  CURRENT  BALANCE. ALL REFUNDS SHALL BE
PROVIDED TO THE CONSUMER WITHIN SIXTY DAYS FROM THE DATE OF  RECEIPT  OF
NOTIFICATION  FROM  THE  CONSUMER THAT THE PREPAID SERVICE HAS FAILED TO
OPERATE IN A COMMERCIALLY REASONABLE MANNER.
  4. EXPIRATION. PREPAID CARDS WITHOUT A  SPECIFIC  EXPIRATION  DATE  OR
POLICY PRINTED ON THE PREPAID CARD AND WITH A BALANCE OF PREPAID SERVICE
REMAINING  SHALL BE CONSIDERED ACTIVE FOR A MINIMUM OF ONE YEAR FROM THE
DATE OF ACTIVATION, OR IF RECHARGED, FROM THE DATE OF THE LAST RECHARGE.
  5. SERVICE SUSPENSION. A PREPAID PROVIDER HAS THE RIGHT TO SUSPEND USE
OF A PREPAID CARD AND ITS ACCESS TO PREPAID SERVICE WHEN  IT  REASONABLY
BELIEVES  THAT  (A) THE PREPAID CARD HAS BEEN STOLEN, OR (B) THE PREPAID
SERVICE HAS BEEN OBTAINED FRAUDULENTLY,  OR  (C)  THE  PREPAID  CARD  OR
SERVICE IS BEING USED IN AN ILLEGAL OR FRAUDULENT MANNER. IF THE PREPAID
PROVIDER SUSPENDS USE OF THE PREPAID SERVICE, THE PREPAID PROVIDER SHALL
DIRECT  AN AFFECTED CONSUMER TO CONTACT CUSTOMER SERVICE WHERE AN EXPLA-
NATION SHALL BE PROVIDED.
  S 103-D. ENFORCEMENT. 1. VIOLATIONS.   THE COMMISSION SHALL  HAVE  THE
POWER AND AUTHORITY TO ASSESS A PENALTY AGAINST ANY PERSON THAT VIOLATES
ANY  PROVISION OF THIS ARTICLE OR ANY REGULATION OR ORDER OF THE COMMIS-
SION IMPLEMENTING OR ENFORCING  THE  PROVISIONS  OF  THIS  ARTICLE.  THE
PENALTY FOR A FIRST VIOLATION SHALL NOT EXCEED FIVE THOUSAND DOLLARS AND
THE  PENALTY FOR EACH SUBSEQUENT VIOLATION SHALL NOT EXCEED TEN THOUSAND
DOLLARS. ALL MONEYS COLLECTED FROM ANY PENALTY SHALL BE  PAID  INTO  THE
GENERAL FUND.
  2.  REGULATIONS.  THE COMMISSION SHALL ADOPT ANY RULES AND REGULATIONS
NECESSARY TO EFFECTUATE THE PURPOSES OF THIS ARTICLE.
  3.  PRIVATE RIGHT OF ACTION. ANY PERSON WHO  SUFFERS  DAMAGES  AS  THE
RESULT OF, OR IS OTHERWISE AGGRIEVED BY, A VIOLATION OF ANY PROVISION OF
THIS ARTICLE, MAY COMMENCE A CAUSE OF ACTION OR ASSERT A COUNTERCLAIM IN
A COURT OF COMPETENT JURISDICTION.
  S  3. Subdivision (g) of section 103 of the abandoned property law, as
added by chapter 170 of the laws of 2004, is amended to read as follows:
  (g) "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, or prepaid  tele-
phone  calling  cards  regulated  under  [section  ninety-two-f] ARTICLE
FIVE-A 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); dependent 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  regulations,  individuals  may  pay  medical
expenses,  health  care  expenses,  dependent  care expenses, or similar

A. 4412                             8

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  4.  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,  or  prepaid  telephone  calling cards regulated under
[section ninety-two-f] ARTICLE FIVE-A 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 5. This act shall take effect on the first  of  the  calendar  month
commencing  immediately  after  the  ninetieth  day  after it shall have
become a law; provided that any rules  and  regulations,  or  any  other
actions, necessary to implement the provisions of this act on its effec-
tive  date are authorized and directed to be completed on or before such
date. This act shall only apply to prepaid cards  printed  on  or  after
such  effective  date,  and to advertisements, promotions, point-of-sale
materials and voice prompts  relating  to  a  prepaid  service  that  is
created,  aired,  printed,  distributed  or otherwise disseminated on or
after such effective date.