Legislation

Search OpenLegislation Statutes
This entry was published on 2014-09-22
The selection dates indicate all change milestones for the entire volume, not just the location being viewed. Specifying a milestone date will retrieve the most recent version of the location before that date.
SECTION 369-EE
Prize award schemes
General Business (GBS) CHAPTER 20, ARTICLE 24-A
§ 369-ee. Prize award schemes. 1. Written disclosure. (a) Unless
written disclosure is made as provided in paragraph (c) of this
subdivision, it shall be unlawful for any person, firm or corporation to
offer a consumer a prize as part of any prize award scheme.

(b) For purposes of this section, "prize award scheme" shall mean a
promotion, solicitation, or advertisement either oral, written, or
otherwise for the purchase or lease of a product, real estate, an
investment, services, a membership, or any other item: (i) in which the
outcome depends in a material degree upon an element of chance,
notwithstanding that skill or performance of the consumer may also be a
factor therein; (ii) where the consumer is told that he has won or may
win a prize or award, or is told that he or she is or may be the winner
of a contest, or where similar language is used which would lead a
consumer to believe that he or she has won or may win a prize or award;
and (iii) which requires the consumer to do something (including, but
not limited to, traveling to a location to accept the prize, listening
to a sales presentation, submitting one's credit card account number,
allowing a sales person into one's home or responding orally or in
writing).

(c) Such written disclosure must be furnished to the consumer at the
time he is notified of the prize and must be written or printed in a
size equal to at least that type used for the standard text on the front
of the first page of the offer. The written disclosure must clearly and
conspicuously disclose all of the following: (i) a full description of
the exact prize won by the consumer including a list price which does
not appreciably exceed the highest price at which substantial sales are
made in the offering area; (ii) all material terms and conditions
attached to the prize; (iii) a statement, where applicable, that the
consumer must submit to a sales presentation; (iv) a full description of
the product, real estate, investment, services, membership or any other
item to be offered for sale, including the price of the least expensive
and the most expensive item or parcel; (v) a notice that if the consumer
decides to purchase any item offered for sale he has three business days
in which to cancel such sale; and (vi) the odds of winning each prize
must be conspicuously disclosed in the same type face, size and boldness
and adjacent to the most prominent listing of the prizes on the front of
the first page of the offer, with the odds stated in arabic numbers and
identify the total number of prizes to be given away and the total
number of offerings to be distributed.

(d) It shall be unlawful to (i) represent that a person is a "winner"
or has been "selected", or words of similar import when all or a
substantial number of those solicited receive the same "prize" or
"opportunity" or (ii) deliver, or cause to be delivered, a prize notice
or offering, which simulates or falsely represents that it is a document
authorized, issued or approved by any court, official, or agency of the
United States or any state, lawyer, law firm, or insurance or brokerage
company, or which creates a false impression as to its source,
authorization, or approval; or (iii) deliver, or cause to be delivered,
a prize notice or offering which is in the form of, or a prize notice or
offering which includes, a document which simulates a bond, check or
other negotiable instrument, whether or not that document contains a
statement or some other indication which suggests that it is
non-negotiable.

2. Right of cancellation. In addition to any other right to revoke an
offer, the consumer may cancel a sale made as a result of a prize award
solicitation until midnight of the third business day after the day on
which he signed a sales agreement. Cancellation occurs when written
notice of cancellation is given to the seller. Notice of cancellation,
if given by mail, shall be deemed given when deposited in a mailbox
properly addressed and postage pre-paid.

2-a. Prize claims by pay-per-call services. It shall be unlawful for
any person, firm or corporation to offer a consumer a prize, if in order
to claim the prize, the consumer must call a pay-per-call service where
the charge for such pay-per-call service is greater than the service
charge authorized by the appropriate regulatory commission. As used in
this subdivision "pay-per-call service" means any telephone service for
which the calling party is assessed, by virtue of completing the call, a
charge for which the caller pays a per-call or per-time charge.

3. Form of notice. (a) In a sale consummated as a result of or made in
association with a prize award scheme, the seller shall furnish to the
buyer (i) a fully completed receipt or copy of any contract pertaining
to such sale at the time of its execution, which is in the same
language, e.g. Spanish, as that principally used in the oral sales
presentation and which shows the date of the transaction and contains
the name and address of the seller, and in immediate proximity to the
space reserved in the contract for the signature of the buyer or on the
front page of the receipt if a contract is not used and in not less than
ten-point bold face type, a statement in substantially the following
form:

"YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY

TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER

THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE

OF CANCELLATION FORM FOR AN EXPLANATION OF THIS

RIGHT."; and

(ii) at the time the buyer signs the contract or otherwise agrees to
buy consumer goods or services from the seller, a completed form in
duplicate, captioned "NOTICE OF CANCELLATION", which shall be attached
to the contract or receipt and easily detachable, and which shall
contain in not less than ten-point bold face type the following
information and statements in the same language, e.g. Spanish, as that
used in the contract:

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 DOES NOT
PICK THEM UP WITHIN TWENTY 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, OR SEND A
TELEGRAM, 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)
and the seller shall complete both copies by entering the name of the
seller, the address of the seller's place of business, the date of the
transaction, 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.

(a-1) In a sale or lease to be consummated as a result of or made in
association with a prize award scheme, the seller shall not employ a
courier to pick up and deliver or a courier pick-up and delivery service
to retrieve a buyer's deposit or payment unless the seller is otherwise
authorized to do business in this state in accordance with the
requirements of the business corporation law or the not-for-profit
corporation law. If the seller fails to comply with this section, the
buyer or any other person obligated for any part of the purchase price
may cancel the contract or lease at any time by notifying the seller in
any manner and by any means of his or her intention to cancel.

(b) In a sale consummated as a result of or made in association with a
prize award scheme, the seller shall inform each buyer orally, at the
time he signs the contract or purchases the goods or services, of his
right to cancel. Until the seller has complied with this section, the
buyer or any other person obligated for any part of the purchase price
may cancel the contract by notifying the seller in any manner and by any
means of his intention to cancel. The period prescribed by this
subdivision shall begin to run from the time the seller complies with
this section.

(c) A prize award scheme contract 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 section including specifically his right to
cancel the sale in accordance with the provisions of this article.

(d) This section shall not apply to the use of promotional materials,
gifts or prizes distributed without charge or expense to any person,
firm or corporation.

(e) This section shall not apply to the use of promotional materials,
gifts, or prizes by a retail store primarily engaged in the retail sale
of goods or services for which this type of promotion is incidental and
which requires the customer only to travel to the merchant's regular
place of business to receive the gift, prize or award.

(f) This section shall not apply to the solicitation or
representations offering a consumer a prize in connection with: (i) the
sale or purchase of books, recordings, videocassettes, periodicals, and
similar goods through a membership group or club which is regulated by
the federal trade commission pursuant to Code of Federal Regulations,
title 16, part 425.1 concerning use of negative option plans by sellers
in commerce; (ii) the sale or purchase of goods ordered through a
contractual plan or arrangement such as a continuity plan, subscription
arrangement, or a single sale or purchase series arrangement under which
the seller ships goods to a consumer who has consented in advance to
receive the goods and after receipt of the goods is given a reasonable
opportunity to examine the goods and to receive a full refund of charges
for the goods, upon return of the goods undamaged; or (iii) sales by a
catalog seller. For purposes of this section, "catalog seller" shall
mean any entity (and its subsidiaries) or person at least fifty percent
of whose annual revenues are derived from the sale of products sold in
connection with the distribution of catalogs of at least twenty-four
pages, which contain written descriptions or illustrations and sale
prices for each item of merchandise and which are distributed in more
than one state with a total annual distribution of at least two hundred
fifty thousand.

4. Violations. Upon any violation of this section, an application may
be made by the attorney general in the name of the people of the state
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 the violation. If it shall appear to the
satisfaction of the court or justice that the defendant has violated
this section, an injunction may be issued by the 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
restitution. Whenever the court shall determine a violation of this
section has occurred, it may impose a civil penalty of not more than one
thousand dollars for each violation. In connection with an application
made under this subdivision, the attorney general is authorized to take
proof and to make a determination of the relevant facts and to issue
subpoenas in accordance with the civil practice law and rules.

5. Effect of other laws. The obligations imposed by this section shall
be in addition to and not in derogation of the requirements of any other
law.

6. Applicability. The provisions of subdivisions two and three of this
section shall not apply to membership campground operators as defined in
section six hundred fifty-one of this chapter.