The New State Senate is considering new consumer protection legislation.
The legislation amends the General Business Law by adding a new article 29-BB entitled “Prohibited Service Offer Practices”.
This proposal addresses an age-old problem whereby consumers struggle with misleading offers of automatic renewals of merchandise and services. In a typical scenario, consumers believe they made a one-time purchase or signed up to receive a free product. Consumers then continue to receive more deliveries of the merchandise, while incurring additional charges to their credit cards or bank accounts. When I was young, the records and books kept coming each month and I was charged for them unless I was able to race to the post office to timely return them.
This legislation would require that businesses which provide automatic renewal or continuous service offers do so in terms that are clear and conspicuous and provide consumers with a straightforward, no- or low-cost means of cancellation.
The bill prohibits businesses from charging consumers without the consumer’s affirmative consent to the specific renewal obligation and requires the business to provide the offer’s terms and cancellation policy in a manner capable of being retained by the consumer.
It would also require such businesses to provide consumers with viable, simple to use contact information so that cancellation is made easy.
The bill provides that any merchandise sent to a consumer under an automatic renewal/continuous service offer without having first obtained the customer’s affirmative consent shall be deemed an unconditional free gift to the consumer.
Companies are also prohibited from advertising products as “free” if the item is only distributed as part of an automatic renewal agreement.
The bill has not yet been taken up in the Assembly.
Jacobowitz & Gubits, LLP, is a full service law firm based in Walden, New York, and operating throughout the Hudson Valley.
This is not intended to be legal advice. You should contact an attorney for your specific situation.