Prohibits the unsolicited mailing of convenience checks to consumers without the express consent of the consumer.
TITLE OF BILL: An act to amend the general business law, in relation to prohibiting the unsolicited mailing of convenience checks to consumers
PURPOSE OR GENERAL IDEA OF BILL:
This bill will discourage banks and other financial institutions from sending out unsolicited checks to consumers and protect consumers from the fraudulent use of such checks.
SUMMARY OF SPECIFIC PROVISIONS: The general business law is amended by adding a new section 520-d. This section provides that consumers sent convenience checks by credit or debit card issuers shall not be liable for the use of such checks unless the consumer has accepted the check by using such check.
When banks send out unsolicited checks, consumers are unable to know whether or not these unrequested checks have come in the mail. These checks are easy targets for mail theft. Thieves may falsely use these checks, and it may be some time before the consumer becomes aware that these were stolen and fraudulently used. By this time, the consumer's credit and bank account balance may have taken a serious hit. This bill would ensure that consumers are not held liable for fraudulent use of such checks.
PRIOR LEGISLATIVE HISTORY:
A2995 (2011-2012) A7500 (2009-2010)
This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 4301 2013-2014 Regular Sessions IN SENATE March 20, 2013 ___________Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection AN ACT to amend the general business law, in relation to prohibiting the unsolicited mailing of convenience checks to consumers THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The general business law is amended by adding a new section 520-d to read as follows: S 520-D. UNSOLICITED CONVENIENCE CHECKS. 1. AS USED IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS: (A) "CHECK" MEANS ANY NEGOTIABLE INSTRUMENT, AS DEFINED BY SECTION 3-104 OF THE UNIFORM COMMERCIAL CODE, THAT HAS IMPRINTED ON IT THE HOLD- ER'S NAME AND THE DEPOSITORY INSTITUTION'S NAME, LOCATION, AND ROUTING NUMBER. (B) "UNSOLICITED CHECK" MEANS ANY CHECK MAILED OR OTHERWISE DELIVERED TO A HOLDER BY AN ISSUER OR AGENT ACTING ON BEHALF OF AN ISSUER FOR THE PURPOSE OF DRAWING ON AN EXISTING ACCOUNT THAT IS AN EXTENSION OF CREDIT OR ACTIVATING AN ACCOUNT TO OBTAIN CREDIT OTHER THAN: (1) IN RESPONSE TO A REQUEST OR APPLICATION FOR A CHECK OR ACCOUNT; OR (2) AS A SUBSTITUTE FOR A CHECK OR ACCOUNT PREVIOUSLY ISSUED TO THE PERSON TO WHOM THE CHECK IS MAILED OR OTHERWISE DELIVERED. 2. NO HOLDER IN WHOSE NAME AN UNSOLICITED CHECK IS ISSUED SHALL BE LIABLE FOR ANY AMOUNT RESULTING FROM USE OF THAT CHECK OR ACCOUNT, UNLESS THE HOLDER HAS ACCEPTED THE CHECK OR ACCOUNT BY USING THE CHECK OR ACCOUNT. FAILURE TO DESTROY OR RETURN AN UNSOLICITED CHECK SHALL NOT CONSTITUTE ACCEPTANCE OF THE CHECK OR ACCOUNT. 3. ANY AGREEMENT ENTERED INTO BY A HOLDER WHICH WAIVES, LIMITS OR DISCLAIMS THE RIGHTS SET FORTH IN THIS SECTION SHALL BE VOID AS CONTRARY TO PUBLIC POLICY. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07754-01-3