Honorable Sheldon Silver
Speaker of the Assembly
State Capitol, Room 349
Albany, New York 12248

Dear Speaker Silver:

It is my pleasure to forward to you the 2006 Annual Report of the Assembly Standing Committee on Consumer Affairs and Protection.

The work accomplished during the 2006 Legislative Session reflects the Committee’s dedication to and concern for consumers’ basic rights, safety, and interests. This year the Committee advanced several privacy initiatives that have been enacted into law, including legislation allowing consumers to "freeze" their credit files to guard against identity theft and a measure mandating privacy protections for Social Security numbers.

Several other laws were enacted this year to protect individual privacy and ensure consumer safety. Chapter 277 of the Laws of 2006 strengthens New York’s prohibition against unsolicited faxes by removing an existing exemption that allowed for the transmission of faxes during the overnight hours. Chapter 519 of the Laws of 2006 will protect the safety of children by requiring the Consumer Protection Board to promulgate regulations for the design, construction, installation, inspection and maintenance of public playgrounds and playground equipment

I would like to take this opportunity to thank the Committee members for their continued contributions to this past year’s achievements. I would also like to express my appreciation for the assistance that the Committee received from the Committee staff in the course of our work. Finally, Mr. Speaker, I commend you for your continued leadership and support of our legislative initiatives to better protect New York State consumers.

Sincerely,

Audrey I. Pheffer, Chair

2006 ANNUAL REPORT

OF THE

NEW YORK STATE ASSEMBLY

STANDING COMMITTEE ON CONSUMER AFFAIRS AND PROTECTION

AUDREY I. PHEFFER, CHAIR

1. COMMITTEE RESPONSIBILITIES AND GOALS
2. 2006 COMMITTEE ACCOMPLISHMENTS
   1. Protecting Personal Privacy

      Security Freeze

      Protecting Consumers from Phishing Scams

      Strengthening New York’s Do-Not-Call Law

      Privacy Protections for Social Security Numbers

      Consumer Communication Records Privacy Act

      Wireless Telephone Consumer Protection Act

      Telecommunications Records Privacy

      Telephone Records Privacy Act

      Reducing the Unnecessary Disclosure of Social Security Numbers

      Identity Theft Assistance

      Radio Frequency Identification Systems Privacy Task Force

      Reducing Unsolicited Advertisements

   2. Improving Business Practices

      Magazine Renewal Disclosure

      Unsolicited Faxes

      Labor Notice Disclosure

      Prohibiting Unfair Billing Practices

      Improving the Farm Equipment Lemon Law

      Dial-up Internet Service Warning

      Motor Vehicle Rentals

      Sale of Memorials and Monuments

      Improving New York’s Pre-need Funeral Account Law

      Protecting Consumers from Unfair "Universal Default" Policies

      Firearm Country of Origin Disclosure

      Protecting Consumers from Price Gouging

      Ensuring Fairness in the Rental Car Industry

      Free Estimates in Writing

      Regulating Credit Card Charges

      Preventing Fraudulent Practices by Computer Industry

      Credit Card Holds in the Lodging Industry

      Increased Penalty for Deceptive Acts

      Credit Scoring

      Magazine Customer Service Number Disclosure

      Increasing Penalties for Automatic Dialing Device Violations

   3. Protecting Consumer Health and Safety

      Public Playground Safety

      Pool Safety

      Extending Wheelchair Warranties

      Yo-Yo Waterballs

      Labeling Sunscreen Products

      Regulating the Sale of Laser Pointers

      Off-Premise Food Consumption Labeling

      Requiring Weight Loss Services to Increase Consumer Disclosures

   4. Enhancing Motor Vehicle Safety

      Air Bags

   5. Increasing Consumer Recourse

      Expanding Consumer Protections for Military Servicepersons

      Victims of Price Gouging

3. HEARINGS AND ROUNDTABLES
   1. Hearing on Security Freeze
   2. Hearing on Consumer Protection in the Wirless Telecommunications Industry
   3. Hearings on Financial Services for Low-Income Consumers
   4. Hearing on Bank Discontinuance of Money Service Business Accounts
   5. Hearing on Debt Collection Practices
   6. Hearing on State Agency Implementation of the Enacted SFY 2006-07 Budget
4. OUTLOOK AND GOALS FOR 2007

APPENDIX A

APPENDIX B

APPENDIX C

APPENDIX D

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 certain 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: Banks; Transportation; Corporations, Authorities, and Commissions; Economic Development, Job Creation, Commerce, and Industry; Agriculture; and Insurance.

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 misuse of 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.

This new law will allow identity theft victims, and those who are concerned that they may become victims, to cut off an identity thief’s access to credit, loans, leases, goods and services by placing a "freeze" on their credit report.

Identity thieves can cause significant damage when they open new credit accounts and loans in the names of their victims. The Consumer Protection Board estimates that it takes the average victim a full year and more than $1,000 to clear their reputations and reestablish their credit. Security freezes allow consumers to prohibit access to the personal information maintained in their credit reports, thereby preventing identity thieves from taking out new loans and credit in their name. Consumers may lift a freeze for specific parties or specific periods of time. This powerful new tool will be free for identity theft victims or to any consumer placing their first freeze. Consumer reporting agencies would be allowed, but not required, to charge consumers who are not identity theft victims a fee of up to five dollars for the removal or lifting of a freeze or the second or subsequent placement of a freeze.

The purpose of this new law is to protect consumers from "phishing" scams by providing additional means for the prosecution of identity thieves engaged in this deceptive activity.

"Phishing" fraudsters send e-mail messages asking consumers to divulge personal information such as their account passwords, account numbers, credit card numbers, social security numbers, or other sensitive information. These e-mails often claim to be from a business or organization with which the consumer may already be familiar, such as an internet service provider, bank, credit card company, online payment service, or government agency. This new law will allow the Attorney General, internet service providers and web page or trademark owners to bring a civil action against those engaged in this new form of internet fraud.

The purpose of this new law is to better protect consumers against unwanted telemarketing calls and to bring consistency and uniformity to the State and federal Do-Not-Call laws.

In 2004, the Federal Trade Commission amended the Telemarketing Sales Rule to require telemarketers to update their Do-Not-Call lists every thirty-one days. New York’s Do-Not-Call law and rules have required telemarketers to update their Do-Not-Call lists every ninety days. This new law amends New York’s statute to require telemarketers to use a version of the Do-Not-Call Registry obtained from the Federal Trade Commission no more than thirty-one days prior to the date that any telemarketing call is made.

It has been well-documented that the widespread public exposure of personal information, especially Social Security numbers, plays a significant role in identity theft. This new law will prohibit businesses and others from making an individual’s Social Security number available to the general public, restrict businesses from printing an individual’s number on mailings or other communications, ban businesses from using an individual’s number as means of access to services, products, or benefits and require that only necessary employees have access to number information.

The purpose of this new law is to prohibit the sale, offering for sale, solicitation or procurement of a consumer’s telephone records.

This new law prohibits any person, corporation, business, firm or other entity from selling, offering for sale, fraudulently transferring, soliciting or procuring a consumer’s telephone records without such consumer’s consent, except as otherwise authorized by law. Law enforcement and anyone acting pursuant to a subpoena are expressly exempted. In the case of a violation, the Attorney General will be permitted to seek an injunction and a civil fine of $1,000 per violation. These penalties will be in addition to any other penalties permitted by law.

Complaints related to wireless telephone service topped the list of nationwide consumer complaints received by the Council of Better Business Bureaus in 2005 and the list of complaints to the New York State Consumer Protection Board. With more consumers using wireless phones as their sole method of telecommunication and in the absence of meaningful federal oversight, it is important that the State take action to protect consumers.

The Wireless Telephone Consumer Protection Act would require wireless service providers to give customers detailed coverage maps, written disclosure of all fees and charges and clearly organized billing statements. The bill would also require wireless providers to allow consumers to cancel service without penalty up to fifteen days after receiving their first bill. This would provide consumers with the ability to review their first bill and determine if they are satisfied with the quality and monthly cost of service based on their actual usage. (Passed Assembly)

Recent media reports have highlighted the vulnerability of consumers’ telephone call records. In one instance, reporters for MacLean’s magazine were able to obtain the personal call records of the Privacy Commissioner of Canada, Jennifer Stoddart, from a US-based data broker. A recent survey by the Electronic Privacy Information Center found forty websites that offer consumers’ private call records.

This bill would protect the privacy of consumers’ telecommunications records by prohibiting telephone service providers from disclosing a customer’s records to an unaffiliated third party without the express consent of such customer. Exemptions would be provided for disclosure in certain situations, including disclosures made pursuant to a court order, disclosures made to law enforcement in emergency situations, and disclosures made to the National Center for Missing and Exploited Children. The bill would also prohibit third parties from releasing any telephone information obtained about another person. (Passed Assembly)

According to privacy advocates, data brokers illegally obtain call records mainly through a practice known as "pretexting," in which a data broker employee contacts a telephone company posing as the customer whose records they have been paid to obtain.

This bill would severely limit this illicit business practice by requiring the use of personal identification numbers to obtain call records. The bill would also require telephone service providers to notify customers of any breach of the security of their call records and enhance telephone service providers’ ability to take legal action against data brokers who violate consumer privacy by selling call records. (Passed Assembly)

The purpose of this bill is to restrict the dissemination and collection of Social Security numbers in order to increase consumer privacy and prevent identity theft.

This bill would require all entities that request an individual’s Social Security number to inform such individual if such disclosure is required under federal or state law or regulation and how the number is intended to be used. The bill would also prohibit entities from requiring an individual to disclose his or her Social Security number, or to refuse any service, privilege or right based on an individual’s refusal to disclose such number, unless such disclosure is required under federal or state law or regulation. (Passed Assembly)

According to the Consumer Protection Board (CPB), it takes the average victim more than a year and more than $1,000 to extricate themselves from the effects of identity theft. This bill would establish an identity theft prevention and mitigation unit within the CPB to serve as a central source of information and assistance for identity theft victims, reducing the time, energy and money that victims must expend to clear their reputations and reestablish their credit. The bill would also create a state task force on identity security that would examine how state agencies use and protect Social Security numbers and other personal identifying information and recommend all necessary legislative and administrative reforms. Lastly, the bill would require law enforcement agencies to take identity theft complaints and issue a report.

Radio frequency identification (RFID) systems use radio waves or other wireless means to transmit the identity of an object or person from a tag or chip to a reader. RFID tags are now small and inexpensive enough to be embedded in consumer products, and several major retailers are moving rapidly to add RFID tags to products they sell. This new technology has several privacy implications, including the potential for the tracking of movements of a person who possesses or handles objects containing RFID tags and the profiling of citizens without their consent.

This bill would establish a task force that would assess various privacy issues associated with the use of RFID by public and private entities and determine the need for the State to regulate this technology in order to ensure personal privacy. (Passed Assembly)

The purpose of this bill is to protect personal privacy and reduce the threat of identity fraud by providing consumers an avenue to decline unsolicited advertisements.

This bill would require senders of unsolicited advertisements to provide a written disclosure notifying consumers of their right not to receive further unsolicited advertisements. The bill would also require senders of unsolicited advertisement to maintain an exclusion list of consumers and prohibit such senders from using the list for any purpose other than compliance with the requirements of this section. (Passed Assembly)

Magazine Renewal Disclosure (Chapter 204 of the Laws of 2006, Pheffer)

The purpose of this new law is to reduce the occurrence of unnecessary and superfluous renewals. Magazine subscribers are constantly bombarded with renewal notices, regardless of how many issues remain as part of their current subscriptions. Very often, these notices lead consumers to believe that their subscription will run out soon, causing an interruption of service. Many consumers do not read the fine print and renew, resulting in months and even years of unwanted pre-paid issues.

This new law will require magazine publishers to provide subscribers with enhanced disclosure of the month and year in which their subscription expires in any written renewal invitation.

Unsolicited advertisements sent to telefacsimile ("fax") machines are an intrusive annoyance. New York State and federal law both prohibit the sending of unsolicited advertisements to a fax machine unless the recipient has an existing business relationship with the sender. Unlike the federal law relating to unsolicited faxes, New York law has allowed for the transmission of unsolicited advertisements during the overnight hours.

This new law eliminates this loophole and conforms New York law to federal law by removing the exemption for the transmission of unsolicited advertisements between the hours of 9:00 p.m. and 6:00 a.m.

The purpose of this new law is to ensure that employers are able to make an informed decision regarding the purchase of government-mandated employee notices or postings. Some businesses have contacted New York State employers using letterhead and graphics that mimic official government agency documents informing them that employers are required to post certain signs and making such signs available for purchase. These government-mandated notices are available free of charge to employers.

This new law will require sellers of government-mandated employee notices or postings to provide written notice to purchasers that such materials are available free of charge from the government office having jurisdiction over the required notices or postings.

The purpose of this law is to prohibit creditors from charging an additional rate or fee based solely on the consumer’s choice of payment method.

This law will, subject to federal law and regulation, prohibit creditors from charging consumers an additional rate or fee, or a differential in any rate or fee, for selecting a payment option requiring the use of mail, paper billing or an electronic transaction involving the internet or telephone. The bill would also authorize enforcement of the prohibition by the Attorney General and provide for a civil penalty of up to two hundred and fifty dollars for each violation.

Chapter 662 of the Laws of 2005, commonly referred to as the Farm Equipment Lemon Law, established basic consumer protections for the purchasers of new farm equipment. This new law makes several technical clarifications to the Farm Equipment Lemon Law. The law also requires dealers to provide a copy of the "New Farm Equipment Bill of Rights" to each consumer at the time of purchase or lease of farm equipment and removes the existing provision that allows suppliers or dealers to extend the thirty day timeframe for repairs to warranted equipment to sixty days during certain seasons as determined by the Department of Agriculture and Markets.

The purpose of this new law is to make a clarification to Chapter 334 of the Laws of 2005, which amended the General Business Law to require Internet service providers to inform consumers that some dial-up internet access numbers may result in long distance charges.

This new law will amend Chapter 334 to clarify that dial-up Internet access software sold or provided to consumers prior to the effective date of that chapter (October 24, 2005) need not provide consumers with the statutorily required warning, if such software cannot be updated by the dial-up Internet service provider. However, dial-up Internet service providers are required to send the notice to their subscribers via either electronic means or mail.

The purpose of this new law is to allow consumers to make side by side price comparisons when shopping for motor vehicle rentals and to clearly see all applicable taxes and fees on rental agreements.

This new law allows rental vehicle companies on rental agreements to itemize charges associated with locating on airport property. The law also allows rental vehicle companies to advertise and quote base rental car rates without including fees associated with locating on airport property in the base rate if the company clearly indicates that additional fees may apply.

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 contracts for any other funeral goods or services. Recently, some companies have circumvented the separate contract law by including memorial foundations or inscriptions on their general price list of funeral goods and services.

This bill would ensure that consumers are able to make informed decisions during their time of mourning by clarifying the separate contract law to provide that each sale of a memorial shall only be evidenced by a written contract completely separate from a price list or similar document reflecting the purchase of other goods and services related to a funeral.

The purpose of this bill is to establish a procedure for the treatment of funds set aside in pre-need funeral accounts that are deemed "abandoned" or "dormant."

This bill would provide that the assets of any preneed funeral account shall be deemed abandoned three years after the death of the beneficiary of the account or one year after the preneed administrator has determined that the beneficiary of such account has died, whichever is later. The bill would also provide that a preneed account shall be considered dormant if a beneficiary’s address cannot be determined for fifteen consecutive years and, based upon the preneed agreement, the beneficiary would have reached an age of one hundred and fifteen years.

An increasing number of credit card issuers are including "universal default" clauses in their agreements, allowing them to raise a customer’s interest rate based on the customer’s indebtedness or late payments to other creditors. For instance, a late payment on a telephone bill could cause a card holder’s interest rate to increase. Notice of this policy is almost always buried in the fine print of the card agreement, leaving many customers unaware that their interest rate could be affected based on late payments to other creditors. This results in credit card holders being penalized, even if they have never been late on a payment to the credit card issuer imposing the penalty.

This bill would put an end to this unfair practice by prohibiting "universal default" policies and provide that any violation of the prohibition would be a criminal offense.

The purpose of this bill is to ensure that consumers are provided with the necessary information regarding the country of origin of a firearm in order to make informed purchasing decisions.

This bill would require advertisements or other promotional material to disclose the country where the firearm, rifle or shotgun was manufactured and provide that a violation of this section shall be deemed both a deceptive act and false advertising.

The dramatic escalation in the price of gasoline and home heating fuel following Hurricane Katrina and Hurricane Rita caused both public outrage and significant concerns about price gouging.

The purpose of this bill is to strengthen the State’s ability to pursue and punish those who engage in price gouging. This bill would improve the State’s price gouging statute by providing a specific standard of proof for price gouging, significantly increasing the civil penalty for gouging, and extending the Attorney General’s jurisdiction over price gouging to include sales in the chain of distribution that occur out of state. (Passed Assembly)

The purpose of this bill is to prevent rental car agencies from discriminating against drivers who do not present a credit card. Current law prohibits agencies from requiring the primary driver of a rental vehicle to own a credit card, but this protection does not extend to non-primary drivers. Some agencies are now requiring all designated drivers to own a credit card.

This bill would prohibit rental car agencies from preventing any person from operating a rental vehicle solely on the requirement of ownership of a credit card. (Advanced to Third Reading Calendar)

This bill would prohibit the advertisement or offer 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 bill 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)

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)

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)

The purpose of this bill is to require temporary lodging establishments that accept reservations by charging a credit card to notify the credit company when that charge account was not used to make the final payment.

This bill would require temporary lodging establishments (e.g., hotels, motels, apartment hotels, inns, boarding-houses, rooming houses or lodging houses) that require that a customer give a credit card for purposes of making a reservation to immediately notify the issuer of the credit card to remove the charge when the customer pays the bill by means other than the credit card. (Passed Assembly)

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. (Advanced to Third Reading Calendar)

The purpose of this bill is to prohibit consumer reporting agencies from lowering a consumer’s credit score based on that consumer’s comparison of available mortgage or automobile loan rates.

This bill would prohibit consumer reporting agencies from using inquiries of mortgage companies, banks or other financial institutions concerning a consumer’s credit in relation to a mortgage or automobile loan in determining that consumer’s credit score. The bill would also prohibit consumer reporting agencies from causing a negative inference to be placed on a consumer credit report based on that consumer’s comparison of mortgage or automobile loan rates. (Passed Assembly)

The purpose of this bill is to ensure that magazine subscribers are provided a reliable and accessible method of contacting magazine publishers with subscription-related inquiries.

This bill would require publishers of magazines sold by subscription to disclose a customer service telephone number on the billing statement or invoice of each magazine mailed to subscribers. (Passed Assembly)

The purpose of this bill is to protect consumers by increasing civil penalties for certain violations related to pre-recorded telephone messages initiated by automatic dialing devices.

This bill would increase civil penalties for calls placed to a consumer or emergency line containing pre-recorded telephone messages initiated by automatic dialing devices. Specifically, the bill would increase the penalty for violations involving a pre-recorded message that failed to terminate properly and auto-dialed calls placed to emergency service lines from $2,000 per call, with a $20,000 within seventy-two hour maximum, to up to $50,000 per call. (Passed Assembly)

Parents hope that the playgrounds where their children meet friends, play and exercise are among the safest places children can spend their time. Unfortunately, that is not always the case and sometimes playgrounds with unsafe conditions contribute to injuries.

The purpose of this new law is to ensure that public playgrounds in New York meet the highest safety standards. The law requires the Consumer Protection Board to promulgate regulations for the design, construction, installation, inspection and maintenance of public playgrounds and playground equipment.

According to the National Center for Injury Prevention and Control (NCIPC), drowning is the second leading cause of unintentional injury-related deaths in children between the ages of one and fourteen nationwide and the third leading cause of injury-related deaths of children in New York. NCIPC data also shows that twenty-six infants and children under fourteen drowned in New York State in 2002 alone.

The purpose of this new law is to provide greater protection against accidental pool drowning incidents by requiring the installation of pool alarms in newly constructed or modified commercial and residential swimming pools.

This new law will apply the same consumer protections that currently exist for purchasers of motorized wheelchairs to non-motorized wheelchairs. It would also 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 law will significantly reduce financial stress for those citizens who rely on wheelchairs to meet their basic transportation needs.

Yo-yo waterballs consist of a liquid-filled ball on an elastic cord with a small finger loop at the end that allows children to throw the ball, stretch the cord and bounce it back like a yo-yo. Since its emergence in 2003, consumer safety agencies around the world have received numerous complaints from parents reporting various injuries involving the toy, including strangulation, laceration and eye injuries. The New York State Consumer Protection Board has issued two warnings calling yo-yo waterballs a serious hazard to children and the United States Consumer Product Safety Commission (CPSC) has received over 400 complaints in the last three years. This bill would prohibit the sale, import, manufacture or distribution of yo-yo waterball toys. (Passed Assembly)

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 four percent 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 a "best if used before date" and storage recommendations. (Passed Assembly)

This bill would prohibit the sale of laser pointing devices to persons less than 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)

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. (Advanced to Third Reading Calendar)

The purpose of this bill is to provide consumers with information on weight loss services and the dangers of rapid weight loss.

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 regarding 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 would be useful to consumers prior to purchasing a product or service. (Passed Assembly)

Air Bags (A.654, Pheffer)

This bill would require airbags to be sold without such sale being tied to 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 would 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)

Expanding Consumer Protections for Military Servicepersons (Chapter 278 of the Laws of 2006, Pheffer)

The Military Law provides the means for members of the armed forces called to active duty to cancel certain rental and lease agreements, such as for housing and automobiles, without penalty. This new law extends this protection by providing that any person who enters into active military service subsequent to the execution of a rental contract for goods or services may cancel such contract at no penalty and with a full refund of any deposit, if such activation causes it to be impossible for that person to abide by the terms and conditions of the rental contract.

Price gouging occurs when businesses take unfair advantage of consumers during abnormal disruptions of the market by charging grossly excessive prices for essential consumer goods and services. Unscrupulous businesses that gouge consumers during difficult times must be held accountable. 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)

On February 6, 2006, the Committee held a joint public hearing with the Senate Committee on Consumer Protection to examine the need for security freezes to combat identity theft and to address questions that were raised during the Committees’ initial hearing on security freeze issues held on November 21, 2005. In 2005, over 17,000 New Yorkers filed identity theft complaints with the Federal Trade Commission (FTC). New York ranks eighth in the nation in the number of identity theft complaints reported to the FTC per capita and third in the total number of identity theft complaints filed. One tool in the fight against identity theft is locking, or freezing, access to consumer credit reports. This prevents identity thieves from taking out new loans and credit in the name of their victim. A consumer who places a security freeze is provided a unique PIN or password that must be given to a credit reporting agency each time the consumer wants to allow access to their credit information.

This hearing investigated the procedures for placing and removing a security freeze, the advantages and disadvantages of placing a freeze, and the experience of states that have implemented laws that allow their residents to place a security freeze. The testimony received at the hearing contributed greatly to the formation of New York’s security freeze law (Chapter 63 of the Laws of 2006), which took effect on November 1, 2006.

On March 13, 2006, the Committee, along with the Committee on Corporations, Authorities and Commissions held a joint public hearing on consumer protection in the wireless telecommunications industry. The purpose of this hearing was to examine the need for increased consumer protection for wireless telephone customers in New York State and, if there is such need, what sort of legislation is needed to guarantee such protection. The hearing examined the effectiveness of voluntary consumer protection efforts undertaken by the wireless telecommunications industry and the impact of deregulation and market concentration of the industry on consumer protection. The hearing also investigated the need for enhanced protection of consumers’ personal telephone records by wireless providers. Issues of current industry efforts to safeguard consumers’ telephone records, methods used by data brokers to obtain such information, and the need for new protections in this area were discussed.

The Committees received valuable testimony from the New York State Consumer Protection Board, wireless telephone service providers, consumer advocates, and privacy experts. Several witnesses recommended passage of the Wireless Telephone Service Consumer Protection Act (A.8539-A). This measure would require the Consumer Protection Board to promulgate regulations implementing several consumer protections for wireless telephone service customers. This legislation passed the Assembly, but has not been acted on by the Senate.

The Committee held two joint public hearings with the Committee on Banks on financial services for low-income consumers; the first in Buffalo on September 20, 2006, and the second in New York City on October 5, 2006.

Low-income consumers face a variety of challenges in the financial marketplace. Many low-income consumers do not have access to traditional banking services and are therefore forced to rely on non-bank entities, such as check cashers and rent-to-own businesses. Many of these consumers also use alternative products offered by traditional service providers, such as short-term "payday loans" and high-cost home loans.

Significant fees and high interest rates are often associated with the use of these alternative services and products.

The purpose of these hearings was to examine the availability, cost and risks of financial services available to low-income consumers and to explore how the State can better protect such consumers. The hearings also investigated the need for increased state regulation of alternative financial service providers, including rent-to-own businesses, check cashers and financial institutions that offer short-term, high-cost loans, in order to ensure consumer protection in this area.

The Committees received useful testimony on this important issue from the New York City Comptroller’s Office, economic justice advocates, consumer advocates, industry representatives and affected consumers. The hearing marked a successful dialogue on possible legislative solutions to protect low-income consumers. The Committees plan to continue the dialogue with government, consumers and industry participants.

On October 4, 2006, the Committee held a joint public hearing with the Committee on Banks to examine the reasons why banks have recently cut their business ties with money service businesses, and to discuss possible remedies to this ongoing problem.

Money service businesses (MSBs), such as money transmitters and check cashers, are indispensable to millions of consumers who may not have access to traditional banking services. In order to provide services to their customers, MSBs must maintain accounts with banks. In recent years, many banks have severed their relationships with MSBs. If new banking relationships cannot be found, MSBs must discontinue their business activities. The end result of this trend is that customers - particularly those who live in areas that contain few or no bank branches and who have found a way to get by without banking services - often find themselves without access to non-bank financial services. This public hearing examined these concerns, and discussed possible remedies to this situation.

On October 24, 2006, the Committee held a joint public hearing with the Committee on Judiciary on debt collection practices. Federal and state laws regulate how debt collectors may communicate with debtors and prohibit the use of certain threatening, deceptive and unfair collection practices. Despite these legal protections, the number of consumer complaints regarding debt collection practices continues to rise. Consumer complaints received by the Federal Trade Commission regarding third-party debt collectors grew for the eighth consecutive year in 2005, and consumers filed with the Commission more complaints against third-party collectors than against any other specific industry. The New York City Department of Consumer Affairs recently reported a seventy percent increase over the past two years in consumer complaints related to debt collection practices.

The purpose of this hearing was to determine how the State can best protect consumers against unfair and deceptive debt collection practices. The hearing also investigated the practices of debt buyers (collection agencies that specialize in acquiring uncollected debts from principal creditors and third-party collectors) and examined the need for the State to implement enhanced consumer protections in this area.

On December 8, 2006, the Committee, along with the Committee on Agriculture, held a public hearing on state agency implementation of the enacted State fiscal year 2006-07 budget. The purpose of this hearing was to review the budget implementation initiatives of the Consumer Protection Board.

The 2007 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 2006 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.

CHAPTERS OF 2006

2006 BILLS PASSED BY THE ASSEMBLY

VETOES of 2006

2006 SUMMARY OF ACTION ON ALL BILLS REFERRED TO THE ASSEMBLY COMMITTEE ON CONSUMER AFFAIRS AND PROTECTION