NY State Senate Bill 2019-S2748

Senate Bill S2748

2019-2020 Legislative Session

Prohibits the imposition of any charge or fee on the telephone bill of a consumer when such fee is imposed by a third party, without the consent of the consumer

download bill text pdf

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to energy and telecommunications
Jan 29, 2019	referred to energy and telecommunications

2019-S2748 (ACTIVE) - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §§92-d & 227-a, add §92-i, Pub Serv L; add §390-bb, Gen Bus L
Versions Introduced in 2017-2018 Legislative Session:: S3202

2019-S2748 (ACTIVE) - Summary

Prohibits the imposition of any charge or fee on the telephone bill of a consumer when such fee or charge is imposed by a third party, unless the consumer explicitly agrees to the nature and amount of such fee or charge; makes the unauthorized imposition of such a fee void and unenforceable; directs the public service commission to enforce such provisions.

2019-S2748 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2748

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend the public service law and the general business law, in
relation to consumer protections against cramming

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill will prohibit the practice of "cramming" the addition of
charges on a telephone bill by a third party without the informed
consent of the consumer.

 
SUMMARY OF SPECIFIC PROVISIONS:

§ 1 amends, § 92-d of the Public Service Law (PSL) to add consumer
protections against cramming to the list of PSL consumer safeguards that
customers must be informed of by local exchange telephone companies.

§ 2 adds a new PSL § 92-i prohibiting the practice of cramming.  "Cram-

ming" is defined as the inclusion or imposition of charges on a tele-
phone bill at the request of a third party that were not authorized by
the customer or, if authorized, were obtained through misleading or
deceptive means. Charges for goods or services (other than those
provided by the telephone company or its affiliates) may be billed only
if the customer explicitly consented to the nature and amount of such
charges after having received clear and conspicuous disclosure of all
terms and conditions. In addition, the third party or its agent must
provide the customer with a toll-free number and address for resolution
of any billing dispute. Any charges imposed without the consumer's
consent having been obtained as provided above are declared void and
unenforceable, and the telephone corporation is repaired to remove them
upon notice from the customer that such charges ware not authorized.

The Public Service Commission shall supervise and ensure compliance with
§ 92-a, and may adopt any necessary rules and regulations, which may
include additional requirements for verification of customer orders and
standards third parties must moot to be authorized to request inclusion
of charges on telephone bills, Any failure to comply by a telephone
corporation may be addressed through the complaint process in PSL 96(3)
or by any other legal means.

§ 3 amends the General Business Law by adding a new section 390-bb
applying the same prohibitions found in § 2 to cable television compa-
nies, many of which operate telephone services. The cramming provisions
in this section only apply to telephone service provided by a cable
television company, and not any other services such companies offer.
This section also rests enforcement powers with the Public Service
Commission.

§ 4 enables the Public Service Commission to enforce the provisions of
this act as related to telephone service offered by cable television
companies.

§ 5 sets forth the effective date.

 
JUSTIFICATION:

New York and other states have recently seen a resurgence of "cramming"
complaints. Cramming refers to the inclusion on a telephone bill of
unauthorized, deceptive or misleading third-party fees or charges. These
charges are often added indirectly through a billing warehouse and can
be described in vague terms such as "enhanced services," "access,"
"activation," or minimum usage fees."  Consumers can become cramming
victim through sweepstakes or contest entry forms, calling "900"
numbers, answering advertisements for information or entertainment
services that are available, and accepting free offers that trigger an
automatic sign-up for as service such as "voice mall" along with a
monthly service fee.  Company telemarketers may offer a free trial with-
out explaining the steps the consumer would have to take to avoid future
charges, or may even doctor tape recordings to make it appear that
consumers had agreed to pay far services when in actuality they did not.
Because their monthly bills are often larger and many pages longer than
residential customers, mall businesses are frequent targets of crammers.

Since the 1990s, Federal and State agencies have tried to address this
issue by working with the telecommunications industry to enact voluntary
guidelines to combat the practice. The New York Attorney General's
office has also negotiated settlement agreements with some of the larger
telephone companies to address consumer complaints.  However, these
sidelines and agreements have only been partially effective, and require
constant vigilance and substantial effort by consumers to guard against
fraud. For every telephone customer who detects and successfully fights
an unauthorized charge, there are many others who pay for them, month
after month without being aware of the scam.

This bill is a proactive effort to prevent the addition of fraudulent
charges to consumers bills in the first place, to provide consumers with
the needed tools to contest instances of cramming, and to ensure that
the burden of proof is on the company seeking to add fees and charges,
and not on individual consumers.

 
PRIOR LEGISLATIVE HISTORY:

S.3202-A of 2017-18.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
Shall take effect on the 180th day after enactment.

2019-S2748 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2748
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 29, 2019
                                ___________
 
 Introduced  by  Sen.  COMRIE -- read twice and ordered printed, and when
   printed to be committed to the Committee on  Energy  and  Telecommuni-
   cations
 
 AN  ACT to amend the public service law and the general business law, in
   relation to consumer protections against cramming

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The opening paragraph of section 92-d of the public service
 law,  as separately amended by chapters 546 and 547 of the laws of 2000,
 is amended to read as follows:
   Each local exchange telephone company shall inform  its  customers  of
 the  provisions  of SECTION NINETY-TWO-I OF THIS ARTICLE, sections three
 hundred ninety-nine-p  [and],  three  hundred  ninety-nine-z  and  three
 hundred ninety-nine-pp of the general business law, and article ten-B of
 the  personal  property  law, as such provisions relate to the rights of
 consumers with respect to CRAMMING, telemarketers, sellers, the no tele-
 marketing sales call statewide registry and automatic dialing-announcing
 devices, by means of:
   § 2. The public service law is amended by adding a new section 92-i to
 read as follows:
   § 92-I.  CRAMMING PROHIBITED. 1. FOR THE  PURPOSES  OF  THIS  SECTION,
 "CRAMMING"  MEANS THE INCLUSION AND IMPOSITION OF CHARGES ON THE INVOICE
 OR BILL OF A CUSTOMER FROM A TELEPHONE CORPORATION AT THE REQUEST  OF  A
 THIRD  PARTY  OR  BILLING AGGREGATOR THAT (A) WERE NOT AUTHORIZED BY THE
 CUSTOMER, OR (B) IF AUTHORIZED,  WERE  OBTAINED  THROUGH  MISLEADING  OR
 DECEPTIVE MEANS.
   2. A CUSTOMER SHALL NOT BE LIABLE FOR CHARGES APPEARING ON THE INVOICE
 OR  BILL  OF A TELEPHONE CORPORATION THAT ARE THE RESULT OF CRAMMING. NO
 CHARGES FOR ANY PRODUCTS OR SERVICES, OTHER THAN THOSE PROVIDED  BY  THE
 TELEPHONE CORPORATION, ITS AFFILIATES, A THIRD PARTY VIDEO PROVIDER WITH
 WHOM  A  TELEPHONE CORPORATION OR ITS AFFILIATE JOINTLY MARKET SERVICES,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD06099-01-9

 S. 2748                             2
 
 OR OTHERWISE PERMITTED BY LAW, SHALL BE INCLUDED ON ANY BILL OR  INVOICE
 OF  A  CUSTOMER,  UNLESS  THE THIRD PARTY REQUESTING THE PAYMENT OF SUCH
 CHARGES RETAINS AND PROVIDES UPON REQUEST VALID PROOF THAT:
   (A) THE CUSTOMER WAS PROVIDED WITH CLEAR AND CONSPICUOUS DISCLOSURE OF
 ALL  MATERIAL  TERMS  AND  CONDITIONS  OF  THE  PRODUCT OR SERVICE BEING
 OFFERED, INCLUDING BUT NOT LIMITED TO ALL INITIAL AND RECURRING  CHARGES
 AND  THE FACT THAT SUCH CHARGES SHALL APPEAR ON THE CUSTOMER'S TELEPHONE
 BILL;
   (B) AFTER RECEIVING CLEAR AND CONSPICUOUS DISCLOSURE  AS  PROVIDED  IN
 PARAGRAPH  (A) OF THIS SUBDIVISION, THE CUSTOMER EXPLICITLY CONSENTED TO
 THE NATURE AND AMOUNT OF SUCH CHARGES; AND
   (C) THE THIRD PARTY OFFERING THE PRODUCT OR SERVICE  OR  AN  AGENT  OF
 SUCH THIRD PARTY PROVIDED THE CUSTOMER WITH A TOLL-FREE TELEPHONE NUMBER
 THE  CUSTOMER MAY CALL AND AN ADDRESS TO WHICH THE CUSTOMER MAY WRITE TO
 RESOLVE ANY BILLING DISPUTE.
   3. ANY CHARGES FOR THIRD PARTY PRODUCTS OR SERVICES THAT ARE  INCLUDED
 ON  A  BILL OR INVOICE BY A TELEPHONE CORPORATION WITHOUT THE CONSENT OF
 THE CUSTOMER HAVING BEEN OBTAINED AS PROVIDED IN SUBDIVISION TWO OF THIS
 SECTION SHALL BE VOID AND UNENFORCEABLE, AND SHALL BE REMOVED  FROM  THE
 BILL OR INVOICE UPON NOTICE FROM SUCH CUSTOMER.
   4.  THE  COMMISSION  SHALL  SUPERVISE  AND  ENSURE COMPLIANCE WITH THE
 PROVISIONS OF THIS SECTION, AND MAY PROMULGATE ANY RULES AND REGULATIONS
 IT DEEMS NECESSARY OR DESIRABLE TO ENSURE SUCH COMPLIANCE, INCLUDING BUT
 NOT LIMITED TO ANY ADDITIONAL REQUIREMENTS FOR VERIFICATION OF  CUSTOMER
 ORDERS  AND  ANY  ADDITIONAL STANDARDS THAT THIRD PARTIES OR AGENTS MUST
 MEET TO BE AUTHORIZED TO RECEIVE PAYMENT THROUGH THE INCLUSION OF CHARG-
 ES ON BILLS OR INVOICES OF TELEPHONE  CORPORATIONS.  ANY  FAILURE  BY  A
 TELEPHONE  CORPORATION TO COMPLY WITH THE PROVISIONS OF THIS SECTION MAY
 BE REDRESSED AS PROVIDED IN SUBDIVISION THREE OF SECTION  NINETY-SIX  OF
 THIS ARTICLE OR AS OTHERWISE AUTHORIZED BY LAW.
   §  3. The general business law is amended by adding a new section 390-
 bb to read as follows:
   § 390-BB. CRAMMING PROHIBITED. 1. FOR THE PURPOSES  OF  THIS  SECTION,
 "CRAMMING"  MEANS THE INCLUSION AND IMPOSITION OF CHARGES ON THE INVOICE
 OR BILL FOR TELEPHONE SERVICE TO A  CUSTOMER  FROM  A  CABLE  TELEVISION
 COMPANY,  AS DEFINED IN SECTION TWO HUNDRED TWELVE OF THE PUBLIC SERVICE
 LAW, THAT PROVIDES TELEPHONE SERVICE TO CUSTOMERS IN NEW  YORK,  AT  THE
 REQUEST OF A THIRD PARTY OR BILLING AGGREGATOR THAT (A) WERE NOT AUTHOR-
 IZED  BY  THE  CUSTOMER,  OR  (B)  IF  AUTHORIZED, WERE OBTAINED THROUGH
 MISLEADING OR DECEPTIVE MEANS.
   2. A CUSTOMER SHALL NOT BE LIABLE FOR CHARGES APPEARING ON THE INVOICE
 OR BILL OF A CABLE TELEVISION COMPANY FOR TELEPHONE SERVICE THAT ARE THE
 RESULT OF CRAMMING. NO CHARGES FOR ANY PRODUCTS OR SERVICES, OTHER  THAN
 THOSE  PROVIDED BY THE CABLE TELEVISION COMPANY, ITS AFFILIATES, A THIRD
 PARTY VIDEO PROVIDER WITH WHOM A CABLE TELEVISION COMPANY OR ITS  AFFIL-
 IATE  JOINTLY  MARKET  SERVICES, OR OTHERWISE PERMITTED BY LAW, SHALL BE
 INCLUDED ON ANY BILL OR INVOICE FOR TELEPHONE SERVICE, UNLESS THE  THIRD
 PARTY  REQUESTING  THE PAYMENT OF SUCH CHARGES RETAINS AND PROVIDES UPON
 REQUEST VALID PROOF THAT:
   (A) THE CUSTOMER WAS PROVIDED WITH CLEAR AND CONSPICUOUS DISCLOSURE OF
 ALL MATERIAL TERMS AND  CONDITIONS  OF  THE  PRODUCT  OR  SERVICE  BEING
 OFFERED,  INCLUDING BUT NOT LIMITED TO ALL INITIAL AND RECURRING CHARGES
 AND THE FACT THAT SUCH CHARGES SHALL APPEAR ON THE CUSTOMER'S FOR  TELE-
 PHONE SERVICE BILL;

 S. 2748                             3
 
   (B)  AFTER  RECEIVING  CLEAR AND CONSPICUOUS DISCLOSURE AS PROVIDED IN
 PARAGRAPH (A) OF THIS SUBDIVISION, THE CUSTOMER EXPLICITLY CONSENTED  TO
 THE NATURE AND AMOUNT OF SUCH CHARGES; AND
   (C)  THE  THIRD  PARTY  OFFERING THE PRODUCT OR SERVICE OR AN AGENT OF
 SUCH THIRD PARTY PROVIDED THE CUSTOMER WITH A TOLL-FREE TELEPHONE NUMBER
 THE CUSTOMER MAY CALL AND AN ADDRESS TO WHICH THE CUSTOMER MAY WRITE  TO
 RESOLVE ANY BILLING DISPUTE.
   3.  ANY CHARGES FOR THIRD PARTY PRODUCTS OR SERVICES THAT ARE INCLUDED
 ON A BILL OR INVOICE FOR TELEPHONE SERVICE BY A CABLE TELEVISION COMPANY
 WITHOUT THE CONSENT OF THE CUSTOMER HAVING BEEN OBTAINED AS PROVIDED  IN
 SUBDIVISION  TWO  OF  THIS  SECTION SHALL BE VOID AND UNENFORCEABLE, AND
 SHALL BE REMOVED FROM THE BILL OR INVOICE UPON NOTICE FROM SUCH  CUSTOM-
 ER.
   §  4.  Subdivision  1  of  section 227-a of the public service law, as
 added by chapter 83 of the laws of 1995, is amended to read as follows:
   1. Every cable  television  company,  and  all  officers,  agents  and
 employees of any cable television company shall obey, observe and comply
 with every order, direction or requirement made by the commission, under
 authority  of  this  article, so long as the same shall be and remain in
 force. Except as provided in subdivision two of this section, any  cable
 television  company which shall violate any provision of this article OR
 SECTION THREE HUNDRED NINETY-BB OF THE GENERAL BUSINESS  LAW,  or  which
 fails,  omits  or  neglects to obey, observe or comply with any order or
 any direction or requirement of the commission,  shall  forfeit  to  the
 people of the state of New York a sum to be set by the commission not to
 exceed  one thousand dollars for each and every offense; every violation
 of any such order or direction or requirement, or  of  this  article  OR
 SECTION  THREE HUNDRED NINETY-BB OF THE GENERAL BUSINESS LAW, shall be a
 separate and distinct offense, and, in case of a  continuing  violation,
 every  day's  continuance  thereof  shall  be  a  separate  and distinct
 offense.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.  Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be  made  and
 completed on or before such effective date.

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