The Business Council of New York State, the state’s leading statewide business and industry association, opposes this legislation that would amend the amend the General Business Law to prohibit certain practices by businesses making an automatic renewal or continuous service offer to consumers in the state.
The bill would require businesses to present terms of automatic renewals and continuous service in a clear and conspicuous manner. It prohibits businesses from charging consumers without their consent to the offer terms. Other provisions include providing a cancellation policy in a manner capable of being retained by the consumer and establishing rules pertaining to the gifting of merchandise (deemed an unconditional gift). Finally, the bill would establish provisions for the Attorney General to seek an injunction for violations (with associated fines) with allowances for businesses to defend themselves if they can prove violations were non-intentional.
Though the bill has many laudable provisions, if this bill were to become law it risks placing in question current law and procedures. While the bill does take into consideration some current procedures by granted exemptions (due to their oversight by state and federal bodies), it does not go far enough. For example, it is important to note that California purposely exempted those entities regulated by the Federal Communications Commission (FCC) in its own automatic renewal legislation. Similar consideration would benefit New York State.
In a related vein, energy service companies (ESCOs) operating in New York State energy markets fall under the General Business Law (GBL 349-d.6.). This law specifically lays out provisions to guarantee renewal between customers and suppliers. These provisions are further strengthened by rules under the Public Service Commission (PSC) that are designed to protect customers from disruptions in service while also providing notice in writing 30-60 days before pending renewal.
While this bill’s intent is to assist New York State consumers, the bill would have a negative impact on certain customers by creating a new system that could be at odds with existing renewal/operating agreement structures.
For the above reasons, The Business Council opposes this legislation.