Senate Bill S6728A

                                BILL NUMBER:S6728A

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:
New bill.


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

EFFECTIVE DATE:
This act shall take effect immediately.