Senate Bill S2432A

                                BILL NUMBER:S2432A

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.  This
bill was amended to make technical changes.

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 or processing payments has
generated thousands or 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.R.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.