S T A T E O F N E W Y O R K
________________________________________________________________________
593--B
2013-2014 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 9, 2013
___________
Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
tee 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 -- recommitted
to the Committee on Consumer Affairs and Protection in accordance with
Assembly Rule 3, sec. 2 -- 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 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" SHALL EXCLUDE SATURDAYS, SUNDAYS, HOLIDAYS AND, IN
THE EVENT THAT THE BUYER PERSONALLY DELIVERS THE CANCELLATION NOTICE TO
THE CLUB, DAYS ON WHICH THE SELLER OF THE BUYER'S AGREEMENT IS CLOSED.
2. "BUYER" AS USED IN THIS ARTICLE MEANS ANY INDIVIDUAL WHO ENTERS
INTO AN AGREEMENT FOR SERVICES WITH A DISCOUNT BUYING CLUB.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02887-06-4
A. 593--B 2
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;
(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 THIRD 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 BUSINESS
DAYS AFTER SUCH CANCELLATION.
2. CANCELLATION OCCURS WHEN WRITTEN NOTICE OF CANCELLATION IS GIVEN TO
THE SELLER. NOTICE OF CANCELLATION NEED NOT TAKE A PARTICULAR FORM AND
IS SUFFICIENT IF IT INDICATES, BY ANY FORM OF WRITTEN EXPRESSION, THE
INTENTION OR DESIRE OF THE BUYER TO CANCEL THE DISCOUNT BUYING CLUB
AGREEMENT.
3. NOTICE OF CANCELLATION, IF GIVEN BY MAIL, SHALL BE DEEMED GIVEN
WHEN DEPOSITED IN A MAILBOX PROPERLY ADDRESSED AND POSTAGE PREPAID.
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 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 TEN-POINT 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 THREE BUSINESS DAYS FROM THE ABOVE DATE.
IF YOU CANCEL, ANY PROPERTY TRADED IN, ANY PAYMENTS MADE BY YOU UNDER
THE CONTRACT OR SALE AND ANY NEGOTIABLE INSTRUMENT EXECUTED BY YOU WILL
BE RETURNED WITHIN 10 BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF
YOUR CANCELLATION NOTICE, AND ANY SECURITY INTEREST ARISING OUT OF THE
TRANSACTION WILL BE CANCELLED. IF YOU CANCEL, YOU MUST MAKE AVAILABLE
TO THE SELLER AT YOUR RESIDENCE IN SUBSTANTIALLY AS GOOD CONDITION AS
WHEN RECEIVED, ANY GOODS DELIVERED TO YOU UNDER THIS CONTRACT OR SALE;
OR YOU MAY IF YOU WISH, COMPLY WITH THE INSTRUCTIONS OF THE SELLER
REGARDING THE RETURN SHIPMENT OF THE GOODS AT THE SELLER'S EXPENSE AND
RISK. IF YOU DO MAKE THE GOODS AVAILABLE TO THE SELLER AND THE SELLER
A. 593--B 3
DOES NOT PICK THEM UP WITHIN 20 DAYS OF THE DATE OF YOUR NOTICE OF
CANCELLATION, YOU MAY RETAIN OR DISPOSE OF THE GOODS WITHOUT ANY FURTHER
OBLIGATION. IF YOU FAIL TO MAKE THE GOODS AVAILABLE TO THE SELLER, OR IF
YOU AGREE TO RETURN THE GOODS TO THE SELLER AND FAIL TO DO SO, THEN YOU
REMAIN LIABLE FOR PERFORMANCE OF ALL OBLIGATIONS UNDER THE CONTRACT. 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 THIRD 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 OR SHE
SIGNS THE AGREEMENT OF HIS OR HER RIGHT TO CANCEL.
3. THE SELLER SHALL INFORM EACH BUYER IN A CLEAR AND CONSPICUOUS
MANNER PRIOR TO A BUYER SIGNING A CONTRACT FOR A DISCOUNT BUYING CLUB
AGREEMENT, THE RANGE OF COSTS OF SUCH AGREEMENT.
4. 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 OR HER
RIGHT TO CANCEL THE SALE IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTI-
CLE.
5. NO SELLER, OR ANY AGENT OR EMPLOYEE THEREOF, SHALL:
(A) 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;
(B) USE TERMS SUCH AS "FREE," OR ANY OTHER TERM OF SIMILAR IMPORT OR
MEANING THAT WOULD LEAD A CONSUMER TO BELIEVE THAT HE OR SHE MAY RECEIVE
SOMETHING OF VALUE ENTIRELY OR IN PART WITHOUT A REQUIREMENT OF COMPEN-
SATION IN ANY FORM, UNLESS ALL MATERIAL TERMS, RESTRICTIONS AND LIMITA-
TIONS OF THE OFFER ARE CLEARLY AND CONSPICUOUSLY DISCLOSED IN THE ADVER-
TISING;
(C) OFFER ANY GIFTS, SWEEPSTAKES OR PRIZES AS A SOLICITATION TO ATTEND
A SALES PRESENTATION OPEN TO THE PUBLIC OR TO SIGN A DISCOUNT BUYING
CLUB AGREEMENT UNLESS THE SELLER HONORS THE GIFT, PROMOTION OR PARTIC-
IPATION IN THE SWEEPSTAKES IN ACCORDANCE WITH THE TERMS OF ITS PROMISE;
(D) OFFER FREE TRIAL MEMBERSHIPS WITHOUT CLEARLY AND CONSPICUOUSLY
DISCLOSING MATERIAL RESTRICTIONS, LIMITATIONS AND CONDITIONS, INCLUDING
ANY RESTRICTIONS ON THE BRANDS AND AMOUNT OF MERCHANDISE THAT CAN BE
PURCHASED;
(E) FAIL TO CLEARLY AND CONSPICUOUSLY DISCLOSE PRIOR TO THE SALE OF A
CLUB MEMBERSHIP ANY COSTS AND FEES ADDED TO THE PRICE OF MERCHANDISE
INCLUDING, BUT NOT LIMITED TO, FREIGHT AND SHIPPING COSTS, HANDLING FEES
AND POTENTIAL MANUFACTURER OR SUPPLIER PRICE INCREASES; OR
(F) IF APPLICABLE, FAIL TO CLEARLY AND CONSPICUOUSLY DISCLOSE PRIOR TO
THE SALE OF A CLUB MEMBERSHIP THAT:
(I) THE FULL PRICE OF THE MERCHANDISE, PLUS APPLICABLE CHARGES, WOULD
BE REQUIRED AT THE TIME OF PLACEMENT OF THE ORDER; AND
A. 593--B 4
(II) THE MANUFACTURER OF THE ORDERED MERCHANDISE DETERMINES THE REFUND
AND CANCELLATION POLICY AND IS THE WARRANTOR OF SAID MERCHANDISE RATHER
THAN THE 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.