S T A T E O F N E W Y O R K
________________________________________________________________________
3173--A
2019-2020 Regular Sessions
I N A S S E M B L Y
January 28, 2019
___________
Introduced by M. of A. DINOWITZ, GOTTFRIED, ARROYO, STIRPE, GALEF,
JOYNER, PICHARDO, ABINANTI, FAHY, SEAWRIGHT -- Multi-Sponsored by --
M. of A. BRAUNSTEIN, COOK, GLICK, RIVERA -- read once and referred to
the Committee on Consumer Affairs and Protection -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the general business law, in relation to prohibiting
certain practices by businesses making an automatic renewal or contin-
uous service offer to consumers in the state
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. It is the intent of the legislature to
end the practice of ongoing charging of consumer credit or debit cards
or third party payment accounts without the consumers' explicit consent
for ongoing shipments of a product or ongoing deliveries of service.
§ 2. The general business law is amended by adding a new article 29-BB
to read as follows:
ARTICLE 29-BB
PROHIBITED SERVICE OFFER PRACTICES
SECTION 527. DEFINITIONS.
527-A. UNLAWFUL PRACTICES.
§ 527. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
DEFINITIONS SHALL APPLY:
1. "AUTOMATIC RENEWAL" MEANS A PLAN OR ARRANGEMENT IN WHICH A PAID
SUBSCRIPTION OR PURCHASING AGREEMENT IS AUTOMATICALLY RENEWED AT THE END
OF A DEFINITE TERM FOR A SUBSEQUENT TERM.
2. "AUTOMATIC RENEWAL OFFER TERMS" MEANS THE FOLLOWING CLEAR AND
CONSPICUOUS DISCLOSURES:
A. THAT THE SUBSCRIPTION OR PURCHASING AGREEMENT WILL CONTINUE UNTIL
THE CONSUMER CANCELS;
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01191-05-9
A. 3173--A 2
B. THE DESCRIPTION OF THE CANCELLATION POLICY THAT APPLIES TO THE
OFFER;
C. THE RECURRING CHARGES THAT WILL BE CHARGED TO THE CONSUMER'S CREDIT
OR DEBIT CARD OR PAYMENT ACCOUNT WITH A THIRD PARTY AS PART OF THE AUTO-
MATIC RENEWAL PLAN OR ARRANGEMENT, AND THAT THE AMOUNT OF THE CHARGE MAY
CHANGE, IF THAT IS THE CASE, AND THE AMOUNT TO WHICH THE CHARGE WILL
CHANGE, IF KNOWN;
D. THE LENGTH OF THE AUTOMATIC RENEWAL TERM OR THAT THE SERVICE IS
CONTINUOUS, UNLESS THE LENGTH OF THE TERM IS CHOSEN BY THE CONSUMER; AND
E. THE MINIMUM PURCHASE OBLIGATION, IF ANY.
3. "CLEAR AND CONSPICUOUS" MEANS IN LARGER TYPE THAN THE SURROUNDING
TEXT, OR IN CONTRASTING TYPE, FONT, OR COLOR TO THE SURROUNDING TEXT OF
THE SAME SIZE, OR SET OFF FROM THE SURROUNDING TEXT OF THE SAME SIZE BY
SYMBOLS OR OTHER MARKS, IN A MANNER THAT CLEARLY CALLS ATTENTION TO THE
LANGUAGE. IN THE CASE OF AN AUDIO DISCLOSURE, "CLEAR AND CONSPICUOUS"
MEANS IN A VOLUME AND CADENCE SUFFICIENT TO BE READILY AUDIBLE AND
UNDERSTANDABLE.
4. "CONSUMER" MEANS ANY INDIVIDUAL WHO SEEKS OR ACQUIRES, BY PURCHASE
OR LEASE, ANY GOODS, SERVICES, MONEY, OR CREDIT FOR PERSONAL, FAMILY, OR
HOUSEHOLD PURPOSES.
5. "CONTINUOUS SERVICE" MEANS A PLAN OR ARRANGEMENT IN WHICH A
SUBSCRIPTION OR PURCHASING AGREEMENT CONTINUES UNTIL THE CONSUMER
CANCELS THE SERVICE.
§ 527-A. UNLAWFUL PRACTICES. 1. IT SHALL BE UNLAWFUL FOR ANY BUSINESS
MAKING AN AUTOMATIC RENEWAL OR CONTINUOUS SERVICE OFFER TO A CONSUMER IN
THIS STATE TO DO ANY OF THE FOLLOWING:
A. FAIL TO PRESENT THE AUTOMATIC RENEWAL OFFER TERMS OR CONTINUOUS
SERVICE OFFER TERMS IN A CLEAR AND CONSPICUOUS MANNER BEFORE THE
SUBSCRIPTION OR PURCHASING AGREEMENT IS FULFILLED AND IN VISUAL PROXIMI-
TY, OR IN THE CASE OF AN OFFER CONVEYED BY VOICE, IN TEMPORAL PROXIMITY,
TO THE REQUEST FOR CONSENT TO THE OFFER. IF THE OFFER ALSO INCLUDES A
FREE GIFT OR TRIAL, THE OFFER SHALL INCLUDE A CLEAR AND CONSPICUOUS
EXPLANATION OF THE PRICE THAT WILL BE CHARGED AFTER THE TRIAL ENDS OR
THE MANNER IN WHICH THE SUBSCRIPTION OR PURCHASING AGREEMENT PRICING
WILL CHANGE UPON CONCLUSION OF THE TRIAL;
B. CHARGE THE CONSUMER'S CREDIT OR DEBIT CARD OR THE CONSUMER'S
ACCOUNT WITH A THIRD PARTY FOR AN AUTOMATIC RENEWAL OR CONTINUOUS
SERVICE WITHOUT FIRST OBTAINING THE CONSUMER'S AFFIRMATIVE CONSENT TO
THE AGREEMENT CONTAINING THE AUTOMATIC RENEWAL OFFER TERMS OR CONTINUOUS
SERVICE OFFER TERMS, INCLUDING THE TERMS OF AN AUTOMATIC RENEWAL OFFER
OR CONTINUOUS SERVICE OFFER THAT IS MADE AT A PROMOTIONAL OR DISCOUNTED
PRICE FOR A LIMITED PERIOD OF TIME; OR
C. FAIL TO PROVIDE AN ACKNOWLEDGMENT THAT INCLUDES THE AUTOMATIC
RENEWAL OR CONTINUOUS SERVICE OFFER TERMS, CANCELLATION POLICY, AND
INFORMATION REGARDING HOW TO CANCEL IN A MANNER THAT IS CAPABLE OF BEING
RETAINED BY THE CONSUMER. IF THE OFFER INCLUDES A FREE GIFT OR TRIAL,
THE BUSINESS SHALL ALSO DISCLOSE IN THE ACKNOWLEDGMENT HOW TO CANCEL AND
ALLOW THE CONSUMER TO CANCEL BEFORE THE CONSUMER PAYS FOR THE GOODS OR
SERVICES.
2. A BUSINESS THAT MAKES AN AUTOMATIC RENEWAL OFFER OR CONTINUOUS
SERVICE OFFER SHALL PROVIDE A TOLL-FREE TELEPHONE NUMBER, ELECTRONIC
MAIL ADDRESS, A POSTAL ADDRESS ONLY WHEN THE SELLER DIRECTLY BILLS THE
CONSUMER, OR ANOTHER COST-EFFECTIVE, TIMELY, AND EASY-TO-USE MECHANISM
FOR CANCELLATION THAT SHALL BE DESCRIBED IN THE ACKNOWLEDGMENT SPECIFIED
IN PARAGRAPH C OF SUBDIVISION ONE OF THIS SECTION.
A. 3173--A 3
3. IN ADDITION TO THE REQUIREMENTS OF SUBDIVISION TWO OF THIS SECTION,
A CONSUMER WHO ACCEPTS AN AUTOMATIC RENEWAL OR CONTINUOUS SERVICE OFFER
ONLINE SHALL BE ALLOWED TO TERMINATE THE AUTOMATIC RENEWAL OR CONTINUOUS
SERVICE EXCLUSIVELY ONLINE, WHICH MAY INCLUDE A TERMINATION EMAIL
FORMATTED AND PROVIDED BY THE BUSINESS THAT A CONSUMER CAN SEND TO THE
BUSINESS WITHOUT ADDITIONAL INFORMATION.
4. IN THE CASE OF A MATERIAL CHANGE IN THE TERMS OF THE AUTOMATIC
RENEWAL OR CONTINUOUS SERVICE OFFER THAT HAS BEEN ACCEPTED BY A CONSUMER
IN THIS STATE, THE BUSINESS SHALL PROVIDE THE CONSUMER WITH A CLEAR AND
CONSPICUOUS NOTICE OF THE MATERIAL CHANGE AND PROVIDE INFORMATION
REGARDING HOW TO CANCEL IN A MANNER THAT IS CAPABLE OF BEING RETAINED BY
THE CONSUMER.
5. THE REQUIREMENTS OF THIS ARTICLE SHALL APPLY ONLY PRIOR TO THE
COMPLETION OF THE INITIAL ORDER FOR THE AUTOMATIC RENEWAL OR CONTINUOUS
SERVICE, EXCEPT AS FOLLOWS:
A. THE REQUIREMENT IN PARAGRAPH C OF SUBDIVISION ONE OF THIS SECTION
MAY BE FULFILLED AFTER COMPLETION OF THE INITIAL ORDER.
B. THE REQUIREMENT IN SUBDIVISION FOUR OF THIS SECTION SHALL BE
FULFILLED PRIOR TO IMPLEMENTATION OF THE MATERIAL CHANGE.
6. IN ANY CASE IN WHICH A BUSINESS SENDS ANY GOODS, WARES, MERCHAN-
DISE, OR PRODUCTS TO A CONSUMER, UNDER A CONTINUOUS SERVICE AGREEMENT OR
AUTOMATIC RENEWAL OF A PURCHASE, WITHOUT FIRST OBTAINING THE CONSUMER'S
AFFIRMATIVE CONSENT, THE GOODS, WARES, MERCHANDISE, OR PRODUCTS SHALL
FOR ALL PURPOSES BE DEEMED AN UNCONDITIONAL GIFT TO THE CONSUMER, WHO
MAY USE OR DISPOSE OF THE SAME IN ANY MANNER HE OR SHE SEES FIT WITHOUT
ANY OBLIGATION WHATSOEVER ON THE CONSUMER'S PART TO THE BUSINESS,
INCLUDING, BUT NOT LIMITED TO, BEARING THE COST OF, OR RESPONSIBILITY
FOR, SHIPPING ANY GOODS, WARES, MERCHANDISE, OR PRODUCTS TO THE BUSI-
NESS.
7. WHENEVER THERE SHALL BE A VIOLATION OF THIS SECTION, 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 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 SECTION, 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 SECTION EIGHTY-THREE
HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES, AND DIRECT RESTITU-
TION. 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 PRAC-
TICE LAW AND RULES. WHENEVER THE COURT SHALL DETERMINE THAT A VIOLATION
OF THIS SECTION HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF
NOT MORE THAN ONE HUNDRED DOLLARS FOR A SINGLE VIOLATION AND NOT MORE
THAN FIVE HUNDRED DOLLARS FOR MULTIPLE VIOLATIONS RESULTING FROM A
SINGLE ACT OR INCIDENT. A KNOWING VIOLATION OF THIS SECTION SHALL BE
PUNISHABLE BY A CIVIL PENALTY OF NOT MORE THAN FIVE HUNDRED DOLLARS FOR
A SINGLE VIOLATION AND NOT MORE THAN ONE THOUSAND DOLLARS FOR MULTIPLE
VIOLATIONS RESULTING FROM A SINGLE ACT OR INCIDENT. NO BUSINESS SHALL BE
DEEMED TO HAVE VIOLATED THE PROVISIONS OF THIS SECTION IF SUCH BUSINESS
SHOWS, BY A PREPONDERANCE OF THE EVIDENCE, THAT THE VIOLATION WAS NOT
INTENTIONAL AND RESULTED FROM A BONA FIDE ERROR MADE NOTWITHSTANDING THE
MAINTENANCE OF PROCEDURES REASONABLY ADOPTED TO AVOID SUCH ERROR.
A. 3173--A 4
8. THE FOLLOWING ARE EXEMPT FROM THE REQUIREMENTS OF THIS ARTICLE:
A. ANY SERVICE PROVIDED BY A BUSINESS OR ITS AFFILIATE WHERE EITHER
THE BUSINESS OR ITS AFFILIATE IS DOING BUSINESS PURSUANT TO A FRANCHISE
ISSUED BY A POLITICAL SUBDIVISION OF THE STATE;
B. ANY ENTITY REGULATED BY THE DEPARTMENT OF FINANCIAL SERVICES;
C. SECURITY SYSTEM ALARM OPERATORS;
D. BANKS, BANK HOLDING COMPANIES, OR THE SUBSIDIARY OR AFFILIATE OF
EITHER, OR CREDIT UNIONS OR OTHER FINANCIAL INSTITUTIONS, LICENSED UNDER
STATE OR FEDERAL LAW; AND
E. SELLERS AND ADMINISTRATORS OF A SERVICE CONTRACT, AS DEFINED PURSU-
ANT TO SECTION SEVEN THOUSAND NINE HUNDRED TWO OF THE INSURANCE LAW.
§ 3. This act shall take effect on the ninetieth day after it shall
have become a law.