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A03245 Summary:

BILL NOA03245D
 
SAME ASSAME AS S05941-B
 
SPONSORPaulin
 
COSPNSRSayegh
 
MLTSPNSR
 
Amd 527-a, Gen Bus L
 
Requires businesses to notify consumers of an upcoming automatic renewal or continuous service charge to the consumer's account forty-five days prior to such charge; requires businesses to include instructions on how to cancel such renewal or charge in the notice to the consumer.
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A03245 Actions:

BILL NOA03245D
 
02/02/2023referred to consumer affairs and protection
02/14/2023amend and recommit to consumer affairs and protection
02/14/2023print number 3245a
02/28/2023reported
03/02/2023advanced to third reading cal.37
03/16/2023amended on third reading 3245b
03/27/2023amended on third reading 3245c
05/09/2023amended on third reading 3245d
06/06/2023substituted by s5941b
 S05941 AMEND=B KAVANAGH
 03/23/2023REFERRED TO CONSUMER PROTECTION
 03/31/2023AMEND AND RECOMMIT TO CONSUMER PROTECTION
 03/31/2023PRINT NUMBER 5941A
 05/12/2023AMEND (T) AND RECOMMIT TO CONSUMER PROTECTION
 05/12/2023PRINT NUMBER 5941B
 05/24/20231ST REPORT CAL.1356
 05/30/20232ND REPORT CAL.
 05/31/2023ADVANCED TO THIRD READING
 06/01/2023PASSED SENATE
 06/01/2023DELIVERED TO ASSEMBLY
 06/01/2023referred to consumer affairs and protection
 06/06/2023substituted for a3245d
 06/06/2023ordered to third reading cal.37
 06/06/2023passed assembly
 06/06/2023returned to senate
 12/12/2023DELIVERED TO GOVERNOR
 12/13/2023SIGNED CHAP.728
 03/23/2023REFERRED TO CONSUMER PROTECTION
 03/31/2023AMEND AND RECOMMIT TO CONSUMER PROTECTION
 03/31/2023PRINT NUMBER 5941A
 05/12/2023AMEND (T) AND RECOMMIT TO CONSUMER PROTECTION
 05/12/2023PRINT NUMBER 5941B
 05/24/20231ST REPORT CAL.1356
 05/30/20232ND REPORT CAL.
 05/31/2023ADVANCED TO THIRD READING
 06/01/2023PASSED SENATE
 06/01/2023DELIVERED TO ASSEMBLY
 06/01/2023referred to consumer affairs and protection
 06/06/2023substituted for a3245d
 06/06/2023ordered to third reading cal.37
 06/06/2023passed assembly
 06/06/2023returned to senate
 12/12/2023DELIVERED TO GOVERNOR
 12/13/2023SIGNED CHAP.728
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A03245 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3245D
 
SPONSOR: Paulin
  TITLE OF BILL: An act to amend the general business law, in relation to requiring busi- nesses to notify consumers of an upcoming automatic renewal or contin- uous service charge forty-five days prior to such charge   PURPOSE:: To require businesses to notify consumers of an upcoming automatic renewal or continuous service charge fifteen to forty five days prior to such Charge on the consumer's account.   SUMMARY OF PROVISIONS:: Section one of the bill amends section 527-a of the general business law to require all businesses notify consumers of an upcoming automatic renewal or continuous service charge to the consumer's account fifteen to forty five days prior to such renewal or charge. The notice shall either include instructions on how to cancel such renewal or charge containing a model termination email with which the consumer can notify the busi- ness of its subscription cancellation or send an email that contains a link to a website where the consumer can terminate the renewal Or charge. Section two provides the effective date.   JUSTIFICATION:: In 2022, most New Yorkers pay for at'least one service' through a subscription model. Subscription services have become more common in recent years, but as millions of Americans stayed home during the pandemic, they turned to digital entertainment and signed up for recur- ring meal delivery services, exercise and diet programs, and monthly clothing subscriptions. This gave many more businesses an incentive to shift to a subscription model that can be paid for and accessed in the comfort of your own home. Most AmericanS are no longer sheltering in place, but the popularity of these subscription services has continued to grow. The Washington Poet reports that the "subscription economy" will grow to $1.5 trillion by 2025, more than double what it was worth in 2021.* Interestingly, most Americans do not even realize just how much they are spending on subscription services. CNBC news reports that close.to a third of consumers underestimate how much they are spending on subscriptions by $100 to $200 dollars every month. The same report explains that 42% of people did not realize they are still paying for a subscription they no longer use.** While many of these services are extremely convenient and accessible, many businesses have adopted deceptive subscription marketing practices that make it very easy to sign up but far more difficult to cancel. In addition, users often unknowingly sign-up or agree to automatic renewals, meaning the company will automatically charge a 'user's account when their contract ends so that the user is then locked in for another year of service. Recently, complaints around this issue have grown exponentially. Just last year, the Federal Trade Commission (FTC) announced its intention to crack down on these deceptive marketing practices - winning a $10 million settlement from a children's education company that unfairly billed users and made it difficult for them to cancel the service. Over 200,000 Americans are receiving refunds as a result of the settlement, demonstrating just how common this issue is for people. This bill wbuld require a business to notify a consumer of an upcoming automatic renewal or continuous service charge 15 to 30 days prior to such charge on a customer's account. The notice must include instructions on how to cancel their subscription in one of two descriptive methods. This legis- lation will ensure transparency from subscription service companies and help protect New Yorkers- from deceptive marketing practices that these companies often utilize.   LEGISLATIVE HISTORY:: New Bill.   FISCAL IMPLICATIONS:: None to the state.   EFFECTIVE DATE:: This act shall take effect immediately. * https://www.washingtonpost.com/business/2021/06/02/ automatic-rene- wals-ftcsubscriptions/ ** https://www.cnbc.com/2022/06/02/consumers-spend-133-more- monthlyon- subscriptionsthan-they-realize.html
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A03245 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         3245--D
                                                                 Cal. No. 37
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 2, 2023
                                       ___________
 
        Introduced  by  M. of A. PAULIN, SAYEGH -- 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 -- reported from committee, advanced  to  a  third  reading,
          amended  and  ordered  reprinted,  retaining its place on the order of
          third reading -- again amended on third  reading,  ordered  reprinted,
          retaining  its place on the order of third reading -- again amended on
          third reading, ordered reprinted, retaining its place on the order  of
          third reading
 
        AN ACT to amend the general business law, in relation to requiring busi-
          nesses to notify consumers of an upcoming automatic renewal or contin-
          uous service charge forty-five days prior to such charge
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivisions 3 and 8 of section 527-a of the general  busi-
     2  ness  law,  as  added by chapter 267 of the laws of 2020, are amended to
     3  read as follows:
     4    3. a. In addition to the  requirements  of  subdivision  two  of  this
     5  section,  a  consumer  who  accepts  an  automatic renewal or continuous
     6  service offer online shall be allowed to terminate the automatic renewal
     7  or continuous service exclusively online, which  may  include  a  termi-
     8  nation  email formatted and provided by the business that a consumer can
     9  send to the business without additional information.
    10    b. A business that allows a consumer to accept an automatic renewal or
    11  continuous service offer for an initial paid term of one year or longer,
    12  provided that such automatic renewal or continuous service renews for  a
    13  paid  term  of  six months or longer, shall notify such consumer of such
    14  upcoming automatic renewal or continuous service charge to such  consum-
    15  er's  account at least fifteen days before, but not more than forty-five
    16  days before, the cancellation deadline for such automatic renewal.  Such
    17  notice shall include instructions on how to cancel such renewal charge.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03135-07-3

        A. 3245--D                          2
 
     1    c.  The  provisions of paragraph b of this subdivision shall not apply
     2  to any business, or subsidiary or affiliate thereof,  regulated  by  the
     3  public service commission or the federal communications commission.
     4    8. The following are exempt from the requirements of this article:
     5    a.  any  service  provided by a business or its affiliate where either
     6  the business or its affiliate is doing business pursuant to a  franchise
     7  issued by a political subdivision of the state;
     8    b.  any  entity,  or subsidiary or affiliate thereof, regulated by the
     9  department of financial services;
    10    c. security system alarm operators;
    11    d. banks, bank holding companies, or the subsidiary  or  affiliate  of
    12  either, or credit unions or other financial institutions, licensed under
    13  state or federal law; and
    14    e. sellers and administrators of a service contract, as defined pursu-
    15  ant to section seven thousand nine hundred two of the insurance law.
    16    § 2. This act shall take effect immediately.
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