Prohibits fee charges for payment of an account regardless of the method of payment.
TITLE OF BILL: An act to amend the general business law, in relation to prohibiting fee charges for payment of an account regardless of the method of payment
PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to protect consumers from unfair payment fees.
SUMMARY OF SPECIFIC PROVISIONS: This bill would prohibit any person or business entity from charging a consumer an additional rate or fee or a differential in the rate or fee associated with payment on an account, whether such payment is made by mail, electronic transfer, telephone authorization, or other means, unless such payment involves an expedited service by a service representative of the person, partnership, corporation, association or other business entity. This bill was amended to make technical changes.
JUSTIFICATION: In recent months, there have been instances of major companies announcing plans to impose an additional fee on the accounts of customers that choose certain payment methods, such as one-time payments made online or over the telephone. Such payment fees unfairly penalize certain consumers and may disproportionately impact low- and moderate-income consumers. In today's world of highly-automated payment systems, the cost of processing payments is often nominal and considered a standard cost of doing business that is included in the total rate or amount charged for services. The recent emergence of proposals that would set payment fees at levels that appears to be significantly higher than the actual cost or processing payments has generated thousands or consumer complaints.
During these tough economic times, many consumers are struggling to Pay their bills and must budget very carefully. These consumers should not be forced to bear the burden of an additional payment charge, unless expedited service is provided. Under this legislation, businesses interested in encouraging the use of certain payment methods may elect to implement incentive-based programs that do not penalize consumers. Several major companies have successfully convinced customers to use electronic billing by providing an incentive to switch from paper billing.
This legislation would expand upon the provisions of section 399-zzz of the General Business Law, which prohibits businesses from charging customers an additional rate or fee when the consumer chooses to pay by United States mail or received a paper billing statement. The bill's provisions are also consistent with the federal Credit C.R.R.D. Act Of 2009, which similarly restricts the ability of card issuers to impose payment fees on cardholder accounts.
PRIOR LEGISLATIVE HISTORY: 2012: S. 6728 - Referred to Consumer Affairs
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None to the State.
EFFECTIVE DATE: This act shall take effect on January 1st next succeeding.
STATE OF NEW YORK ________________________________________________________________________ 2432--A Cal. No. 445 2013-2014 Regular Sessions IN SENATE January 17, 2013 ___________Introduced by Sens. KLEIN, MAZIARZ -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the general business law, in relation to prohibiting fee charges for payment of an account regardless of the method of payment THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1 of section 399-zzz of the general business law, as added by chapter 556 of the laws of 2010, is amended to read as follows: 1. (A) Subject to federal law and regulation, no person, partnership, corporation, association or other business entity shall charge a consum- er an additional rate or fee or a differential in the rate or fee asso- ciated with payment on an account: (I) when the consumer chooses to
[pay by United States mail or]receive a paper billing statement; OR (II) WHETHER SUCH PAYMENT IS MADE BY MAIL, ELECTRONIC TRANSFER, A LIVE CUSTOMER SERVICE REPRESENTATIVE, TELEPHONE AUTHORIZATION BY MEANS OF A VOICE RESPONSE UNIT OR INTERACTIVE VOICE RESPONSE SYSTEM, OTHER MEANS OR A COMBINATION THEREOF, UNLESS SUCH PAYMENT IS EXPEDITED BY SUCH PERSON, PARTNERSHIP, CORPORATION, ASSOCIATION OR OTHER BUSINESS ENTITY TO CREDIT SUCH PAYMENT THE SAME DAY OR, IF THE PAYMENT IS RECEIVED AFTER ANY ESTABLISHED CUT-OFF TIME, THE NEXT BUSINESS DAY. FOR THE PURPOSES OF THIS SUBPARAGRAPH, "EXPEDITED" MEANS A RUSH PAYMENT METHOD OUTSIDE THE NORMAL AND USUAL COURSE OF BUSINESS. (B) This subdivision shall not be construed to prohibit a person, partnership, corporation, association or other business entity from offering consumers a credit or other incentive to elect a specific payment or billing option. S 2. This act shall take effect on the first of January next succeed- ing the date on which it shall have become a law.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03106-05-3