NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6663A
SPONSOR: Lee TITLE OF BILL:
An act to amend the general business law, in relation to clear and
conspicuous pricing practices regarding mandatory junk fees
PURPOSE::
To eliminate hidden junk fees by requiring sellers to display the total
price of a good or service, inclusive of all mandatory fees.
SUMMARY OF PROVISIONS::
Section one of the bill refers to the title of the act, the "New York
Junk Fee Prevention Act."
Section two of the bill amends the general business law by adding a new
§ 396-yy, which includes five subdivisions.
Subdivision 1 defines "mandatory fee" while making certain exceptions.
It also defines "total price" as the full price that a consumer must
pay, inclusive of all mandatory fees associated with the transaction.
Subdivision 2 requires any person or entity who solicits or facilitates
a purchase directly from a consumer to clearly and conspicuously display
the total price of a good or service, inclusive of all mandatory fees,
in every offer or advertisement in most circumstances, and disclosure of
mandatory fee exceptions prior to accepting payment.
Subdivision 3 relates to the enforcement of this section, authorizing
the attorney general to bring actions and seek injunctions. It also
allows private individuals adversely affected by violations of this
section to sue for damages.
Subdivision 4 sets forth compliance for those: providing broadband in
compliance with the relevant federal regulations; cable services in
compliance with the relevant federal regulations; financial institutions
which comply with listed federal standards; those imposing surcharges on
sales transactions where a consumer elects to use a credit card instead
of other payment means; food service establishments which display the
percentage of automatic and mandatory gratuity to be charged; services
that contain a total price that cannot be reasonably known at the time
of an offer as long as there is a clear.and conspicuous disclosure of
factors, mandatory fees, and that the total price may vary; ongoing
auctions that clearly and conspicuously disclose all amounts required to
be paid and that the total price may vary; and short-term lodging accom-
modations that comply with the relevant federal regulations.
Subdivision 5 provides that those subject to subdivision four of § 25.07
of the arts and cultural affairs law, and air carriers, shall not be
subject to the provisions of this section.
Section three of the bill adds a severability clause.
Section four of the bill relates to the effective date.
JUSTIFICATION:
Consumers have become all too familiar with the hidden costs of junk
fees. Rarely can someone complete a transaction without getting hit with
a service fee, fulfillment fee, convenience fee, or some other hidden
charge. These junk fees raise the prices of everything from concert
tickets and hotel bookings to car rentals and Internet services.
In addition to harming consumers, junk fees place honest businesses at a
competitive disadvantage. Companies that immediately disclose the total
price of their products inclusive of all mandatory fees will often lose
customers to bad faith actors who advertise a lower charge but actually
charge more. By allowing junk fees to proliferate, the market ends up
rewarding companies that engage in predatory bait-and-switch tactics
while punishing those that are transparent with consumers.
Similar legislation has been enacted in California, Minnesota, Colorado,
Virginia and Massachusetts. Bills have been introduced in Arizona,
Connecticut, Florida, Hawaii, Illinois, Maine, North Carolina', Rhode
Island, and at the federal level.
LEGISLATIVE HISTORY::
2024: S7783-B (Gianaris) PASSED SENATE / A9192 (Lee) died in consumer
protection
FISCAL IMPLICATIONS::
None to the state.
EFFECTIVE DATE::
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.
