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

                                  6088

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              March 4, 2011
                               ___________

Introduced  by M. of A. PHEFFER -- read once and referred to the Commit-
  tee on Consumer Affairs and Protection

AN ACT to amend the general business law, in relation  to  enacting  the
  discount buying club consumer protection act

  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 article
30-B to read as follows:
                              ARTICLE 30-B
              DISCOUNT BUYING CLUB CONSUMER PROTECTION ACT
SECTION 641.   SHORT TITLE.
        641-A. DEFINITIONS.
        641-B. BUYER'S OR OTHER OBLIGOR'S RIGHT TO CANCEL.
        641-C. FORM OF NOTICE; STATEMENT OF BUYER'S RIGHTS.
        641-D. ENFORCEMENT; PENALTIES.
  S 641. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY  BE  CITED  AS
THE "DISCOUNT BUYING CLUB CONSUMER PROTECTION ACT".
  S  641-A.  DEFINITIONS.  AS  USED IN THIS ARTICLE, THE FOLLOWING TERMS
SHALL MEAN:
  1. "BUSINESS DAY" MEANS ANY CALENDAR DAY EXCEPT SUNDAY  OR  ANY  LEGAL
HOLIDAY.
  2.  "BUYER"  AS  USED  IN THIS ARTICLE MEANS ANY INDIVIDUAL WHO ENTERS
INTO AN AGREEMENT FOR SERVICES WITH A DISCOUNT BUYING CLUB.
  3. "DISCOUNT BUYING CLUB"  MEANS  ANY  PERSON,  FIRM  OR  CORPORATION,
WHICH,  IN  EXCHANGE  FOR  VALUABLE  CONSIDERATION, OFFERS TO SELL OR TO
ARRANGE THE SALE OF GOODS OR SERVICES TO ITS CUSTOMERS AT PRICES REPRES-
ENTED TO BE LOWER THAN ARE GENERALLY  AVAILABLE.  SUCH  TERM  SHALL  NOT
INCLUDE:
  A.  ANY  COOPERATIVE  BUYING  ASSOCIATION  OR  OTHER GROUP IN WHICH NO
PERSON IS INTENDED TO PROFIT OR ACTUALLY PROFITS BEYOND THE BENEFIT THAT
ALL MEMBERS RECEIVE FROM BUYING AT A DISCOUNT;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09185-03-1
              

A. 6088                             2

  B. ANY PERSON, FIRM OR CORPORATION THAT:
  (I)  FOR  FIFTY DOLLARS OR LESS SELLS TICKETS OR COUPONS VALID FOR USE
IN OBTAINING GOODS OR SERVICES FROM A RETAIL MERCHANT; OR
  (II) AS A SERVICE COLLATERAL TO ITS PRINCIPAL  BUSINESS,  AND  FOR  NO
ADDITIONAL  CHARGE, ARRANGES FOR ITS MEMBERS OR CUSTOMERS TO PURCHASE OR
LEASE DIRECTLY FROM PARTICULAR MERCHANTS AT A SPECIFIED DISCOUNT; OR
  (III) CHARGES AN ADVANCE FEE FOR ACCESS TO SERVICE,  OR  MEMBER  BENE-
FITS,  AND  ALLOWS  THE  BUYER  TO TERMINATE MEMBERSHIP BY NOTIFYING THE
PERSON, FIRM OR CORPORATION OF INTENT TO  TERMINATE  MEMBERSHIP  WITHOUT
FURTHER OBLIGATION TO MAKE ADDITIONAL PAYMENTS.
  4. "SELLER" SHALL MEAN ANY PERSON, PARTNERSHIP, CORPORATION OR ASSOCI-
ATION ENGAGED IN THE SALE OF DISCOUNT BUYING CLUB SERVICES.
  S 641-B. BUYER'S OR OTHER OBLIGOR'S RIGHT TO CANCEL. 1. IN ADDITION TO
ANY  RIGHT OTHERWISE TO REVOKE AN OFFER, THE BUYER MAY CANCEL A DISCOUNT
BUYING CLUB AGREEMENT UNTIL MIDNIGHT OF THE FIFTH BUSINESS DAY AFTER THE
DAY ON WHICH THE BUYER HAS SIGNED THE AGREEMENT.  SUCH  AGREEMENT  SHALL
IMPOSE NO LIABILITY ON THE BUYER FOR SUCH CANCELLATION. THE SELLER SHALL
PROVIDE  A  REFUND  OF  ANY FEE PAID BY THE BUYER NOT MORE THAN TEN DAYS
AFTER SUCH CANCELLATION.
  2. CANCELLATION OCCURS WHEN WRITTEN NOTICE OF CANCELLATION IS GIVEN TO
THE SELLER.
  3. NOTICE OF CANCELLATION, IF GIVEN BY MAIL,  SHALL  BE  DEEMED  GIVEN
WHEN DEPOSITED IN A MAILBOX PROPERLY ADDRESSED AND POSTAGE PREPAID.
  4.  NOTICE OF CANCELLATION NEED NOT TAKE THE FORM PRESCRIBED AND SHALL
BE SUFFICIENT IF IT INDICATES THE INTENTION  OF  THE  BUYER  NOT  TO  BE
BOUND.
  S 641-C. FORM OF NOTICE; STATEMENT OF BUYER'S RIGHTS. 1. IN A DISCOUNT
BUYING CLUB SERVICE SALE, THE SELLER SHALL FURNISH TO THE BUYER:
  (A)  A  FULLY COMPLETED RECEIPT OR COPY OF ANY AGREEMENT PERTAINING TO
SUCH SALE AT THE TIME OF ITS EXECUTION, WHICH IS IN THE  SAME  LANGUAGE,
E.G.    SPANISH, AS THAT PRINCIPALLY USED IN THE ORAL SALES PRESENTATION
AND WHICH SHOWS THE DATE OF THE TRANSACTION AND CONTAINS  THE  NAME  AND
ADDRESS  OF THE SELLER, AND IN IMMEDIATE PROXIMITY TO THE SPACE RESERVED
IN THE AGREEMENT FOR THE SIGNATURE OF THE BUYER AND  IN  NOT  LESS  THAN
TWELVE-POINT  BOLD FACE TYPE, A STATEMENT IN SUBSTANTIALLY THE FOLLOWING
FORM:
  "YOU, THE BUYER, MAY CANCEL THIS TRANSACTION  AT  ANY  TIME  PRIOR  TO
MIDNIGHT  OF  THE FIFTH BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION.
SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF  THIS
RIGHT."; AND
  (B)  AT THE TIME THE BUYER SIGNS THE DISCOUNT BUYING CLUB AGREEMENT, A
COMPLETED FORM IN DUPLICATE, CAPTIONED "NOTICE OF  CANCELLATION",  WHICH
SHALL  BE  ATTACHED  TO  THE  AGREEMENT AND EASILY DETACHABLE, AND WHICH
SHALL CONTAIN IN NOT LESS THAN TWELVE-POINT BOLD FACE TYPE THE FOLLOWING
INFORMATION AND STATEMENTS IN THE SAME LANGUAGE, E.G. SPANISH,  AS  THAT
USED IN THE AGREEMENT:
                         NOTICE OF CANCELLATION
  (ENTER DATE OF TRANSACTION) _________________________________________
  (DATE)
  YOU  MAY  CANCEL  THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION,
WITHIN FIVE BUSINESS DAYS FROM THE ABOVE DATE.
  IF YOU CANCEL, ANY PAYMENTS MADE BY YOU UNDER THE  AGREEMENT  AND  ANY
NEGOTIABLE  INSTRUMENT EXECUTED BY YOU WILL BE RETURNED WITHIN TEN BUSI-
NESS DAYS FOLLOWING RECEIPT BY THE SELLER OF YOUR  CANCELLATION  NOTICE,
AND  ANY  SECURITY  INTEREST  ARISING  OUT  OF  THE  TRANSACTION WILL BE

A. 6088                             3

CANCELLED. TO CANCEL THIS TRANSACTION, MAIL  OR  DELIVER  A  SIGNED  AND
DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE TO
  (NAME  OF  SELLER),                             AT (ADDRESS OF SELLER)
__________________
  _________________________________
  (PLACE OF BUSINESS)                      NOT LATER THAN MIDNIGHT OF
  ____________________________________ (DATE)
  I HEREBY CANCEL THIS TRANSACTION.
  _________________ (DATE)
  ______________________________ (BUYER'S SIGNATURE)
THE SELLER SHALL COMPLETE BOTH COPIES BY ENTERING THE NAME OF THE  SELL-
ER, THE ADDRESS OF THE SELLER'S PLACE OF BUSINESS, THE DATE OF THE TRAN-
SACTION, AND THE DATE, NOT EARLIER THAN THE FIFTH BUSINESS DAY FOLLOWING
THE  DATE  OF  THE  TRANSACTION,  BY  WHICH THE BUYER MAY GIVE NOTICE OF
CANCELLATION.
  2. THE SELLER SHALL INFORM EACH BUYER ORALLY AT THE TIME HE SIGNS  THE
AGREEMENT OF HIS OR HER RIGHT TO CANCEL.
  3.  A  DISCOUNT BUYING CLUB AGREEMENT OR RECEIPT SHALL NOT INCLUDE ANY
CONFESSION OF JUDGMENT OR ANY WAIVER OF ANY OF THE RIGHTS TO  WHICH  THE
BUYER IS ENTITLED UNDER THIS ARTICLE INCLUDING SPECIFICALLY HIS RIGHT TO
CANCEL THE SALE IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE.
  4.  NO  SELLER,  OR  ANY  AGENT OR EMPLOYEE THEREOF, SHALL DIRECTLY OR
INDIRECTLY REPRESENT IN ANY MANNER DURING A SALES  PRESENTATION  THAT  A
CONSUMER  MUST SIGN AN AGREEMENT ON THE SAME DAY AS SUCH PRESENTATION IN
ORDER TO AVOID A LIFETIME PROHIBITION ON PURCHASING DISCOUNT BUYING CLUB
SERVICES FROM SUCH SELLER.
  S  641-D.  ENFORCEMENT;  PENALTIES.  1.  WHENEVER  THERE  SHALL  BE  A
VIOLATION  OF THE PROVISIONS OF THIS ARTICLE, 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 ARTICLE, AN
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  ARTI-
CLE  HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF NOT MORE THAN
ONE THOUSAND DOLLARS FOR EACH VIOLATION. IN  CONNECTION  WITH  ANY  SUCH
PROPOSED  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.
  2. NOTHING IN THIS SECTION SHALL IN ANY WAY LIMIT RIGHTS  OR  REMEDIES
WHICH ARE OTHERWISE AVAILABLE UNDER LAW TO THE ATTORNEY GENERAL.
  S  2. If any provision of article 30-B of the general business law, as
added by section one of this act, or the application of  such  provision
in  certain  circumstances  shall  be  held invalid, the validity of the
remainder of such article and its applicability to  other  circumstances
shall not be affected.
  S  3. This act shall take effect on the first of January next succeed-
ing the date upon which it shall have become a law.