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I. Committee Responsibilities and Goals
The Assembly Consumer Affairs and Protection Committee (the "Committee") is responsible for
developing legislation aimed at protecting consumers' rights and ensuring the public's ability to make informed
choices in the marketplace. Generally, the Committee has jurisdiction over legislation that amends sections of
the General Business and Personal Property Laws and parts of the Agriculture and Markets and Education Laws.
The broad interests of the Committee reflect the fact that today's consumers can be victims of fraud, misinformation,
or lack of information that is vital to their health, safety, and welfare.
To protect consumers' rights and help them make informed choices, the Committee works with consumer groups
and state and federal agencies. At the State level, these agencies include: the Department of Law; the Consumer
Protection Board; the Department of Education; the Department of Environmental Conservation; the Department of
Health; the Department of Agriculture and Markets; and the Department of State. The federal government agencies
with which the Committee works include: the Federal Trade Commission (FTC); the Food and Drug Administration
(FDA); the Federal Communications Commission (FCC); the Consumer Product Safety Commission (CPSC); and
the National Highway Traffic Safety Administration (NHTSA). The Committee also works with local agencies, such as
the New York City Department of Consumer Affairs, local consumer affairs offices, numerous Better Business Bureaus,
and bar associations throughout the State.
In addition, the Committee works to help consumers in the development of legislation under the jurisdiction of other
Assembly standing committees. Such committees include: Transportation; Corporations, Authorities, and Commissions;
Economic Development, Job Creation, Commerce, and Industry; Agriculture; and Insurance.
II. 2004 COMMITTEE ACCOMPLISHMENTS
A. Protecting Personal Privacy
The Assembly has traditionally been a strong advocate for the protection of consumers' rights, including the
protection of personal privacy. As technology continues to evolve, the potential for inappropriate actions
concerning personal information has risen dramatically. The public is increasingly aware that it has less
control over its personal and sensitive information. Privacy issues include a number of very broad topics,
such as: the theft of identity; credit reporting; and telecommunications.
The Committee has taken great strides in promoting legislation that would protect the privacy of New York State's
consumers.
Keeping Social Security Numbers Private (A.532, Greene)
This bill would restrict the dissemination and collection of Social Security Numbers, thereby protecting the personal
privacy of New Yorkers.
This bill tracks the intent of the federal Privacy Act of 1974 by stipulating that every person, firm, partnership, or
corporation that requests a social security number from an individual shall inform such individual, in writing or
orally when the request is made orally, whether federal or state law or regulation authorizes the solicitation of the
social security number, whether disclosure of such number is mandatory or voluntary, and the principal purpose or
purposes for which such information is intended to be used. If a person refuses to supply his or her social security
number and a federal or state law or regulation does not mandate it, the person cannot be denied service. (Passed
Assembly)
Credit Card Confidentiality (A.2837, Kaufman)
This bill would reduce the proliferation of unsolicited mail caused by the release or sale of cardholder information by
granting consumers the choice of having personal information kept confidential.
Consumer resistance to unsolicited direct mail has been steadily increasing. Some responsible card issuers
recognize the importance of consumer privacy and limit the release of cardholder information or notify their customers
of the option not to have their personal data released. Unfortunately, not all consumers are aware of this option.
(Passed Assembly)
Electronic Mail Address (A.5153, Pheffer)
This bill would prohibit the sale, lease, or exchange of a consumer's electronic mail address without that consumer's
consent.
It would protect the privacy interests of consumers who unknowingly have their electronic mail address and other personal
identifying information "harvested" online. Specifically, this bill prohibits the sale, lease, or exchange of such
information without the subject's affirmative consent. (Passed Assembly)
Credit Card Usage and Privacy (A.6114, Kaufman)
This bill would prohibit a merchant from writing a customer's address and telephone number on a sheet of paper
attached to a credit card transaction form. The bill also would remove the exception in the credit card privacy law that
allows a merchant to record the customer's name and address when the amount of the transaction is below the store's
floor limit. (Passed Assembly)
B. Improving Business Practices
Sellers of Memorials and Monuments (Chapter 73 of the Laws of 2004, Morelle)
The purpose of this bill is to provide consumers with certain necessary and clear information in a separate written
contract for the sale of a memorial or monument.
Existing statute, commonly referred to in the death-care industry as the "separate contract law," requires
that each sale of a monument be evidenced by a contract separate and apart from any other funeral goods or services,
and provides for specific contractual provisions and requirements. This law includes municipal corporations and political
subdivisions within the definition of "seller" of memorials and monuments, thereby requiring a separate
contact in these instances as well.
Gift Certificate Terms and Conditions Disclosure (Chapter 170 of the Laws of 2004, Pheffer)
This legislation clarifies that the definition of "gift certificates" includes gift cards and requires that limitations
placed on gift certificates by issuers (including expiration dates, any fees charged against the balance, and replacement
policy) shall be disclosed to a consumer at the time of purchase.
Gift Certificate Fees (Chapter 171 of the Laws of 2004, Pheffer)
The purpose of this law is to address the fees that are charged against a gift certificate.
This measure prohibits the imposition of retroactive fees and the imposition of monthly service fees until the thirteenth
month of dormancy.
Telemarketing Fine (Chapter 417 of the Laws of 2004, Klein)
This law increases the fine for violating the provisions of the State No-Telemarketing-Sales-Calls Statewide Registry
to the same level as the penalty for violating the National Do-Not-Call Registry. The increase is from $5,000 to $11,000.
Global Positioning Devices (Chapter 476 of the Laws of 2004, Pheffer)
This law prohibits a rental vehicle company from using information from any global positioning system technology to
determine or impose any costs, fees, charges, or penalties on an authorized driver for such driver's use of a rental vehicle.
However, this law will not limit the ability of a rental vehicle company to impose fees for the recovery of that vehicle if it is
lost, misplaced, or stolen.
Gift Certificate Amendment (Chapter 507 of the Laws of 2004, Pheffer)
This law: (1) requires, at a minimum, that the gift certificate's expiration date and the terms of any service fees and
replacement card fees to be on the gift certificate; (2) eliminates the complete exemption for gift certificates that are sold
below face value or at a volume discount to consumers and employees or to nonprofit and charitable organizations or
educational institutions for fundraising purposes, but retains the exemption from the sign posting requirement; and (3)
provides that local governments are preempted from adopting requirements that differ from the state law.
Motor Vehicle Towing (Chapter 690 of the Laws of 2004, John)
This law requires commercial towers responding to a call for assistance from a stranded motorist to either repair the
vehicle and render it safely operable or transport both the vehicle and its occupants to a reasonably safe location where
such repairs can be made. The commercial tower would also be required to accept cash and all other forms of payment
that such commercial tower accepts in the ordinary course of business, including credit and debit cards.
Rental Vehicle Fuel Charges (Veto Memo 262, Lafayette)
The purpose of this bill is to prohibit price gouging by rental car companies for gasoline used by renters.
This bill would define "flat rate" for the purposes of this section, and cap the amount, per gallon, that rental
car companies may charge renters to refill rental cars. The cap would be set at five percent (5%) above the average
retail price for the same motor fuel graded product sold at self service pumps in the region, as recorded by the State
Energy Office, or other responsible state agency. This bill would exempt rental car companies which disclose their fuel
charge policies to renters.
Cleaning Rental Clothing (A.193, Morelle)
This bill would require that rented clothing be cleaned prior to re-rental. Most consumers assume that rental clothing is
cleaned prior to being rented. However, under current law, there is no requirement that businesses do so.
A consumer's expectation for hygienic rental practices should be met. Customers who are paying for the rental of clothing
should know that such item has been properly cleaned and cared for before it is available for rent. (Passed Assembly)
Requiring Toll-Free Numbers for Unsolicited Services (A.204, Cahill)
This legislation would require telephone service providers to furnish toll-free customer service numbers for consumers
offered unsolicited services through a negative option-sales plan. Under current law, a company or business offering
unsolicited telephone service in New York State for any specific period of time is not required to provide a toll-free number
for consumers to discontinue such service.
Without appropriate access to service providers in respect to billing, rate, and other information, a consumer may be
vulnerable to charges for additional services that they do not want or cannot afford. (Passed Assembly)
Regulating Credit Card Charges (A.245, Lentol)
The purpose of this bill is to prohibit credit card companies from imposing a fee on customers who choose not to carry
a monthly balance. Paying off the monthly balance on a credit card is something many people strive to accomplish.
Imposing a fee on such conscientious credit card holders to offset the losses incurred by other card holders is an unjust
business practice.
This bill would send a clear message that companies should support their customers who pay off their bills in a timely
manner and not penalize them. (Passed Assembly)
Unordered Goods and Services (A.351, Greene)
This bill would prohibit charging consumers for unordered or unrequested goods and services and "negative-option
plans" - offers by businesses that purport to be accepted if not rejected by the consumer within a stated period of
time. The bill would carve out an exception for membership or club arrangements in which the recipient receives goods
at specified intervals and plans pursuant to which the recipient agrees to receive goods without further obligation.
(Passed Assembly)
Free Estimates in Writing (A.354, Greene)
This bill would prohibit the advertising or offering of free estimates unless the estimate is in writing and there is no
charge for providing such estimate. Unscrupulous merchants sometimes offer "free estimates." After
providing the offered estimate, the merchant then insists on being paid for a written estimate.
This proposed legislation would require that estimates advertised as free are indeed provided at no charge to the
customer. This requirement would protect consumers from merchants who might try to employ misleading business
practices. (Passed Assembly)
Preventing Fraudulent Practices by Computer Industry (A.637, Brodsky)
This bill would protect consumers from fraudulent practices by computer manufacturers and retailers by prohibiting
the industry from selling as "new" computers and computer accessories with old or recycled parts. For
example, in 1996, the Packard-Bell Computer Company was caught and convicted of trying to pass off as new
remanufactured and used computer parts.
This bill would mandate that the computer industry use only new computer parts when it sells "new"
computer hardware, monitors, printers, and other accessories to consumers. It also would require retailers to affix
a label or tag on the outside of the container box indicating that only new parts have been used on the computer.
(Passed Assembly)
Unsolicited Facsimiles (A.2266, Magee)
This bill would prohibit unsolicited facsimiles to an individual or business if no prior business relationship was
established. This bill would eliminate the loophole in the current law, which allows companies to transmit advertising
faxes overnight during the time between 9:00 p.m. and 6:00 a.m. This bill would still allow the transmittal of faxes if there
were a previous business relationship with the person receiving them.
This bill attempts to secure a person's peace and quite without interruption from the ringing of their fax machine that is
receiving an advertisement from a company with which they never had a business relationship. (Passed Assembly)
Claiming a Prize (A.5136, Perry)
This bill would prohibit the offering of a prize, if in order to claim the prize, the consumer must call a pay-per-call
service where the charge for such service is greater than the charge for the transmission of the call as assessed
by a telephone corporation regulated by the public service commission. (Passed Assembly)
Clarification of Additional Credit Card Protections (A.5148, Pheffer)
This bill would require any written solicitation, the purpose of which is to provide credit protection services, to disclose
that the purchase of such services is not required to secure or retain a credit card. In addition, the solicitation would also
include a concise statement about a consumer's rights under the Fair Credit Reporting Act. The bill would prohibit the
automatic renewal of credit protection services unless the consumer is notified not more than sixty days in advance nor
less than fifteen days prior to the termination of the existing agreement.
Companies that offer credit card protection services should be required to disclose current federal regulations
regarding consumer credit and debit card liability, as well as consumer rights under the Fair Credit Reporting Act.
These simple disclosures will enable a consumer to make an informed decision prior to entering into a credit protection
service agreement. (Passed Assembly)
Increased Penalty for Deceptive Acts (A.8372, Peoples)
This bill would increase, from $500 to $5,000, the maximum penalty that may be imposed on a commercial enterprise
that engages in an unfair or deceptive trade practice.
The New York law, which provides for penalties of up to $500 per violation of the state's deceptive practices and false
advertising statutes, went into effect in 1963 and the amount of the penalty has not been adjusted upward since then.
This amount is grossly outdated and such an insignificant penalty does not provide a disincentive to the commission
of deceptive acts and practices. (Passed Assembly)
Labeling Salmon (A.9424-B, Grodenchik)
This bill would require farm-raised or wild salmon sold at retail to be labeled accordingly. (Passed Assembly)
C. Protecting Consumer Health and Safety
The Sale of Ephedra (Chapter 12 of the Laws of 2004, Pheffer)
This law clarifies who is eligible to dispense ephedra supplements under Chapter 385 of the Laws of 2003. However,
subsequent to the enactment of this bill, the Food and Drug Administration has banned the sale of dietary supplements
containing ephedra (ephedrine alkaloids) due to concerns over their cardiovascular effects, including increased blood
pressure and irregular heart rhythm.
Drawstrings in Clothing (Chapter 225 of the Laws of 2004, Dinowitz)
This bill would prohibit the sale of any clothing from children's size 2T up to children's size 16, inclusive, that has a
drawstring at the bottom opening of an upper garment or a drawstring at the waist longer than three inches. The bill
would also prohibit the sale of any children's clothing up to and including children's size 12 that has a hood or neck
opening drawstring, and defines "drawstring," "tie," "hood," "neck
opening," toggle, and "aglet".
Prohibiting Sale of Box Cutters (A.128, Markey)
This law prohibits the sale of utility knives or "box cutters" to persons under the age of eighteen. In the
past few years, the incidence of assaults on students and teachers in New York State has escalated dramatically, and
utility knives are sometimes being used as weapons by students. This legislation would prevent these tools from being
misused and brought into schools. In addition, this legislation would allow communities to enact laws stricter than the
state law regarding the sale and regulation of box cutters. (Passed Assembly)
Requiring Weight Loss Services to Increase Consumer Disclosures (A.586, Cook)
The purpose of this bill is to provide consumers with guidance and protection when choosing weight loss services and
products. It requires anyone selling or offering for sale weight loss services or products to provide certain disclosures to
the consumer.
Millions of New Yorkers have tried or are trying to lose weight for medical and cosmetic reasons. It is estimated that
dieters across the nation are spending as much as $33 billion each year on diet programs and products. Unfortunately,
the results of medical research about the safety and effectiveness of diet programs are often vague and contradictory.
This makes it difficult for consumers to decide what programs and products to use. The disclosure of certain weight loss
and dieting information will be useful to such a consumer prior to purchasing a product or service. (Passed Assembly)
Labeling Sunscreen Products (A.1061, Weisenberg)
This bill would require all sunscreen products to be labeled with an expiration date. According to the American
Cancer Society, over 800,000 new skin cancer cases of highly curable basal cell or squamous cell cancers are
diagnosed each year. Since 1973, the incidence of skin cancer has increased about 4% per year.
Many consumers use sunscreen products to prevent the risk of skin cancer. In light of how important these products
are in combating skin cancer, it is important that the consumer be aware that sunscreen does not protect against the
sun's rays after a certain shelf life. This legislation would increase consumer awareness of sunscreen product
effectiveness by requiring all products to be labeled with an expiration date and storage recommendations.
(Passed Assembly)
Regulating the Sale of Laser Pointers (A.2485, Tokasz)
This bill would prohibit the sale of laser pointing devices to persons under eighteen years of age. The Food and
Drug Administration (FDA) warns parents that children may risk their eyesight if they play with laser pointing devices.
The FDA has stated that the light energy that such devices emit can be more damaging than staring directly into the sun.
Eye injuries have already been reported to the FDA as a result of improper use of such devices. In addition, this bill would
set up restricted access for the sale of these devices in stores. (Passed Assembly)
Off Premise Food Consumption Labeling (A.4244, Englebright)
This bill would mandate labeling to inform consumers of the date of preparation of foods intended for off-premises
consumption offered for sale in delicatessens, salad bars, and other food establishments by requiring a label
indicating the date of preparation. By labeling the freshly prepared food, consumers will be given the information
necessary to decide whether it is in their best interest to purchase the item. (Passed Assembly)
Extending Wheelchair Warranties (A.6232, Sanders)
This bill would apply the same consumer protections that currently exist for purchasers of motorized wheelchairs to
non-motorized wheelchairs. It would extend warranty, replacement, and quality standards to wheelchairs purchased
by State agencies, non-profit medical, dental, health and hospital service corporations, and health maintenance
organizations.
Wheelchairs and their customized component parts are absolutely essential to the mobility of many persons with
disabilities. Wheelchairs are also very expensive, costing as much as $8,000. Much of this equipment is subject to
frequent breakdown and is often not covered by warranties or other basic consumer protection. This bill would
significantly reduce financial stress for those citizens who rely on wheelchairs to meet their basic transportation
needs. (Passed Assembly)
CPR Requirement (A.6821, Pheffer)
This bill would require health clubs that provide training services to have in attendance during business hours at
least one employee who has satisfactorily completed a course in cardiopulmonary resuscitation and first-aid.
(Passed Assembly)
D. Enhancing Motor Vehicle Safety
Motor Home Lemon Law (Chapter 635 of the Laws of 2004, Pheffer)
This law amends the definition of "living facilities" to describe in greater detail motor home components
that are not covered under the Lemon Law.
As well, this measure permits two repair attempts to a motor home or permits the motor home to be out of service for
twenty-one days, whichever occurs first, before triggering a notice requirement. The consumer would notify the
manufacturer or the dealer, of the defect by certified mail, return receipt requested, and may institute any proceeding
or other action pursuant to this section if the motor home has been out of service by reason of three repair attempts
or for at least thirty-six days.
This law does not count a repair attempt if the repair facility is not authorized by the applicable motor home manufacturer
to perform warranty work on the identified nonconformity. It counts as only one repair attempt for a motor home if the same
nonconformity is being addressed a second time due to the consumer's decision to continue traveling and to seek the
repair of the same nonconformity at another repair facility rather than wait for the initial repair to be completed.
The bill would add a "New Motor Home Lemon Law Bill of Rights" outlining the rights and responsibilities of
the consumer and manufacturer and dealer.
Air Bags (A.11342-A, Pheffer)
This bill would require airbags to be sold without such sale being tied into the sale of other goods and services.
The requirements under this bill are applicable to new motor vehicles only and would not apply to airbags required
to be installed by federal law. A motor vehicle dealer shall not be in violation of this section if the dealer, after due
diligence, is unable to acquire from the manufacturer a vehicle equipped with airbags as an option without the purchase
of a package of options. (Passed Assembly)
E. Increasing Consumer Recourse
Victims of Price Gouging (A.5155, Pheffer)
Currently, only the State Attorney General is empowered to bring legal action against violators of the price gouging statute.
This bill would leave the Attorney General's powers intact, but would also permit individual victims of price gouging to sue
the price gougers directly. (Passed Assembly)
Authorizing Class Action Lawsuits in Anti-Trust Actions (A.5158, Pheffer)
This bill would correct a legislative oversight, by affording consumers who allege anti-trust violations the right to file suit
as part of a class action and seek damages as a group.
Section 340 of the General Business law provides that agreements for monopoly or in restraint of trade are illegal
and void and that the state or any person damaged by such agreements may sue for damages. In 1999, a new
subdivision was added, providing a right of action where the claim arose from a purchase made indirectly. In 2000,
the New York Supreme Court dismissed two class action suits brought pursuant to section 340 of the General Business
law holding that section 340 provides for treble damages and is therefore punitive. In that instance a class action will
survive only when a statute specifically provides for it.
This bill would extend that remedy to private suits. The history of the anti-trust law reflects the desire of the legislature to
protect consumers and to enable them to seek damages if appropriate. Broadening the methods of righting the wrong
would better utilize resources and reduce the costs of bringing actions. This would serve both the legal system and the
consumer. (Passed Assembly)
Permitting Transportation Costs (A.6528, Kaufman)
This bill would permit the arbitrator in a dispute over a motorized wheelchair warranty to award reasonable attorney
fees and the reasonable and necessary costs of attending an in-person hearing to a prevailing consumer. Current law
provides that each party has the right to be in attendance at any presentation, but does not provide for reimbursement to
disabled consumers the cost of transportation to a presentation. (Passed Assembly)
III. HEARINGS AND ROUNDTABLES
A. Hearing Regarding the Suspension of CashPoint Network Services, Inc
On September 24, 2004, the Committee held a joint hearing with the Committee on Banks. The purpose of the
hearing was to discuss issues regarding the suspension of CashPoint's license to operate in New York State.
CashPoint was a licensed money transmitter as well as provided bill paying and check cashing services. On
April 21, 2004, the New York State Banking Department suspended the license of CashPoint Network Services, Inc.,
citing that the company had as much as $40 million in outstanding debt to creditors.
The goal was to examine this situation within the context of what went wrong, what the consequences of the suspension
will be to consumers, businesses, and the banking community, and what might be done in the future to avoid a situation
like this.
Representatives included the first deputy superintendent of banks from the New York State Banking Department, the
president of Financial Service Centers of New York, the executive director of the National Money Transmitters
Association, Inc., and general counsel from External Compliance Officer, Inc.
The hearing marked a successful dialogue on possible legislative solutions, as well as a possible educational
campaign for consumers. The committees plan to continue the dialogue with government, consumers, and industry
participants.
IV. OUTLOOK AND GOALS FOR 2005
The 2005 Legislative Session promises to present many challenges to the Consumer Affairs and Protection Committee.
The Committee will pursue many of the issues it addressed during the 2004 Session, and new issues will emerge for
consideration. As in the past, the Committee will continue to address issues brought to its attention by legislators, the
executive branch, staff, and by the people of the State of New York.
APPENDIX A
CHAPTERS OF 2004
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Includes municipal corporations and political subdivisions within the definition of "seller" of
memorials and monuments. Chapter 73 of the Laws of 2004.
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Expands special provisions of the new motor vehicle lemon law relating to mobile homes.
Chapter 635 of the Laws of 2004.
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Clarifies who is eligible to dispense ephedra supplements under Chapter 385 of the Laws of 2003.
Chapter 12 of the Laws of 2004.
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Increases the fine for violating the provisions of the State No-Telemarketing-Sales-Calls
Statewide Registry to same level as the penalty for violation of the National Do-Not-Call Registry.
Chapter 417 of the Laws of 2004.
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Prohibits retroactive fees assessed against gift certificates, and prohibits monthly
service fees prior to the thirteenth month of dormancy. Chapter 171 of the Laws of 2004.
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Requires the disclosure of the terms and conditions of a gift certificate.
Chapter 170 of the Laws of 2004.
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Requires commercial towers of motor vehicles who accept credit and debit cards in the
regular course of business to do so when towing at request of owner or operator.
Chapter 690 of the Laws of 2004.
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Prohibits the sale of any clothing from children's size 2T up to children's size 16, inclusive, that
has a drawstring at the bottom opening of an upper garment or a drawstring at the waist longer
than three inches, and it prohibits the sale of any children's clothing up to and including children's
size 12 that has a hood or neck opening drawstring, and defines "drawstring,"
"tie," "hood," "neck opening," "toggle," and
"aglet". Chapter 225 of the Laws of 2004.
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Prohibits rental car companies from using information from any global positioning
device to impose fees on an authorized driver for the driver's use of the rental vehicle.
Chapter 476 of the Laws of 2004.
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Requires disclosures of allowable fees assessed against unexpired gift certificates.
Chapter 507 of the Laws of 2004.
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