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.