Legislation
SECTION 527-A
Unlawful practices
General Business (GBS) CHAPTER 20, ARTICLE 29-BB
§ 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
proximity, 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.
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,
merchandise, 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 business.
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
restitution. 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. 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.
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
pursuant to section seven thousand nine hundred two of the insurance
law.
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
proximity, 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.
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,
merchandise, 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 business.
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
restitution. 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. 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.
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
pursuant to section seven thousand nine hundred two of the insurance
law.