S T A T E O F N E W Y O R K
________________________________________________________________________
S. 392 A. 1031
2009-2010 Regular Sessions
S E N A T E - A S S E M B L Y
(PREFILED)
January 7, 2009
___________
IN SENATE -- Introduced by Sens. BRESLIN, ADAMS, DILAN, DUANE, HASSELL-
THOMPSON, KLEIN, KRUEGER, KRUGER, MONTGOMERY, ONORATO, PARKER, SAMP-
SON, SAVINO, SCHNEIDERMAN, SMITH, STAVISKY, VALESKY -- read twice and
ordered printed, and when printed to be committed to the Committee on
Consumer Protection
IN ASSEMBLY -- Introduced by M. of A. McENENY -- read once and referred
to the Committee on Consumer Affairs and Protection
AN ACT to amend the general business law, in relation to charge accounts
used in the purchase of mail-order, telephone-order or internet mail-
order merchandise
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 396-m of the general business law, as amended by
chapter 802 of the laws of 1984, paragraphs a and e of subdivision 2 and
paragraph b of subdivision 3 as amended by chapter 72 of the laws of
2007, paragraph h of subdivision 3 as amended by chapter 407 of the laws
of 1987 and paragraph j of subdivision 3 as amended by chapter 16 of the
laws of 2006, is amended to read as follows:
S 396-m. Mail-order [or], telephone-order OR INTERNET MAIL-ORDER
merchandise. 1. This section shall apply to any mail-order business
[or], any telephone order business OR ANY INTERNET MAIL-ORDER BUSINESS
which is located in this state or advertises a New York state mailing
address or telephone number.
2. Definitions, as used in this section:
a. "mail-order business" shall mean a business which is engaged in the
solicitation of orders by advertisement or otherwise for merchandise or
services connected with merchandise to be shipped to the customer
through the mail or by other carrier, upon receipt of an order with
payment or with charge account authorization remitted through the mail,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03591-01-9
S. 392 2 A. 1031
electronic mail or the Internet or by telephone and the merchandise by
its nature is ready for use or consumption when advertised or offered
for sale and can be held in stock.
b. "merchandise" shall mean tangible chattels bought for personal,
family or household purposes.
c. "shipment" shall mean the act whereby the seller physically places
the merchandise into the possession of the United States postal service
or other carrier.
d. "telephone order business" shall mean a mail order business which
accepts orders by telephone, or a business which is primarily engaged in
the solicitation of orders by advertisement or otherwise for merchandise
or services connected with merchandise to be shipped to the customer
through the mail or by other carrier, upon receipt of an order with
charge account authorization remitted by telephone and the merchandise
by its nature is ready for use or consumption when advertised or offered
for sale and can be held in stock.
e. "accepts orders" shall mean, in the case of a mail order, receipt
of an order with payment or with charge account authorization remitted
through the mail, electronic mail or the Internet, and, in the case of a
telephone order, receipt of an order with charge account authorization
and debiting the buyer's account.
F. "INTERNET MAIL-ORDER BUSINESS" SHALL MEAN AN INTERNET MAIL-ORDER
BUSINESS WHICH ACCEPTS ORDERS VIA THE INTERNET, OR A BUSINESS WHICH IS
PRIMARILY ENGAGED IN THE SOLICITATION OF ORDERS BY ADVERTISEMENT OR
OTHERWISE FOR MERCHANDISE OR SERVICES CONNECTED WITH MERCHANDISE TO BE
SHIPPED TO THE CUSTOMER THROUGH THE MAIL OR BY OTHER CARRIER, UPON
RECEIPT OF AN ORDER WITH CHARGE ACCOUNT AUTHORIZATION REMITTED VIA THE
INTERNET AND THE MERCHANDISE BY ITS NATURE IS READY FOR USE OR CONSUMP-
TION WHEN ADVERTISED OR OFFERED FOR SALE AND CAN BE HELD IN STOCK.
3. No person, partnership, firm, association or corporation or agent
or employee thereof who conducts a mail-order business [or], a telephone
order business OR AN INTERNET MAIL-ORDER BUSINESS shall:
a. advertise for sale merchandise which is not reasonably anticipated
to be available for shipment within thirty days from date of publication
or broadcast of advertisement or from date catalog or circular is
mailed, unless a longer period of time is clearly and conspicuously
stated in such advertisement. Whenever the term "thirty days" appears in
this section, such term shall include a longer period of time if clearly
and conspicuously stated in such advertisement.
b. accept orders for merchandise which is not reasonably anticipated
to be available for shipment within thirty days from the date of receipt
of the order together with payment or with charge account authorization
in the case of an order remitted through the mail, electronic mail or
the Internet or within thirty days from the date the seller debits the
buyer's account in the case of an order placed by telephone.
c. unless the seller qualifies and elects to be governed by paragraph
i OF THIS SUBDIVISION, fail to either ship ordered merchandise or issue
a refund (if payment has been remitted) for ordered merchandise which is
not available within thirty days of receipt of order and payment there-
for.
d. unless the seller qualifies and elects to be governed by [paragra-
graph] PARAGRAPH i OF THIS SUBDIVISION, fail to either ship ordered
merchandise or issue a credit (if charge-account authorization has been
given and exercised by seller) for ordered merchandise which is not
available within thirty days of receipt of order and charge-account
authorization therefor.
S. 392 3 A. 1031
e. fail to issue a refund or credit the customer's account if prom-
ised, upon demand of the customer within thirty days from the date of
receipt of request for such refund provided the merchandise has been
returned, if required.
f. fail to maintain a record of each complaint alleging failure to
ship merchandise or furnish services connected with merchandise solicit-
ed and ordered on a pre-paid basis and the disposition of each such
complaint. Such record shall be kept for a period of at least eighteen
months following the disposition of such complaint.
g. fail to maintain records showing the employment of systems and
procedures designed to comply with requirements of this subdivision.
h. fail to prominently feature in all advertising or other promotional
materials containing a post office box address including order blanks
and forms, the legal name of the company soliciting the order, the
complete street address of such company and under what conditions a
refund will be issued including but not limited to whether a refund will
be issued:
(i) at any time, or not beyond a point in time specified; or
(ii) in cash, or as credit or in-house credit only. This paragraph
shall not apply to a mail-order business that has a policy of accepting
returns, for a period of not less than twenty days after the date of
delivery of merchandise to the customer and providing a cash refund for
a cash purchase or providing a cash refund or issuing a credit for a
credit purchase, which credit is applied to the account on which the
purchase was debited, in connection with the return of its unused and
undamaged merchandise. Provided, however, that nothing contained herein
shall prohibit a mail-order business from applying a cash payment for
returned merchandise towards a prior outstanding balance. Provided,
further, that nothing contained herein shall be deemed to require a cash
refund of less than one dollar where the mail-order business provides
in-house credit for such sum.
i. where the seller, due to circumstances beyond his OR HER control,
is unable to make shipment within the time required by this section, the
provisions of paragraphs c and d of this subdivision shall not apply if
the seller elects to be governed by this paragraph and does either of
the following:
(i) sends to the buyer a notice of delayed shipment, stating the dura-
tion of the expected delay, providing the buyer with the opportunity to
express his OR HER choice whether to: (A) cancel his OR HER order and
receive a refund[,]; (B) be shipped the merchandise or be furnished the
services by a specified later date, PROVIDED THAT THE SELLER: (1) DOES
NOT DEBIT THE CHARGE ACCOUNT OF THE BUYER UNTIL SUCH TIME AS THE
MERCHANDISE IS SHIPPED; OR (2) WHERE THE DEBIT IS ALREADY CHARGED TO THE
BUYER'S ACCOUNT, CREDITS THE CHARGE ACCOUNT OF THE BUYER UNTIL SUCH TIME
AS THE MERCHANDISE IS SHIPPED, AT WHICH TIME SUCH CHARGE MAY BE DEBITED
TO THE BUYER'S CHARGE ACCOUNT; or (C) to accept substitute merchandise
of equivalent or superior quality. If the seller proposes to substitute
merchandise, he OR SHE shall describe it in detail, indicating how it
differs from the goods ordered. The notice shall be sent by first class
mail and accompanied by a self-addressed, postage paid device upon which
the buyer may indicate his OR HER choice, and mailed in advance of the
expiration of the thirty day period, or that time stated in the solic-
itation. The notice shall expressly advise the buyer that the order
will be immediately cancelled and a refund forwarded where the buyer
does not choose otherwise by response within thirty-five days of the
date of mailing by the seller of the above notice. If, prior to ship-
S. 392 4 A. 1031
ment, the seller receives a response from the buyer requesting refund,
such refund shall be promptly made. If no response is received prior to
the expiration of the thirty-five day period after the date of the mail-
ing by the seller of the above notice, the seller shall make a prompt
refund[.];OR
(ii) send the customer substitute merchandise of equivalent or superi-
or quality, if the customer is extended the opportunity to return the
substituted merchandise and the seller promises to refund to the custom-
er the postage cost of returning such merchandise together with any
portion of the purchase price previously paid by the customer. Prior to
or at the time of shipment of the substitute merchandise, a notice shall
be provided to the customer stating the right to obtain a refund and
reimbursement for the postage cost incurred in returning the substituted
merchandise.
For purposes of subparagraphs (i) and (ii) of this paragraph, merchan-
dise may not be considered of "equivalent or superior" quality if it is
not substantially similar to the merchandise ordered, or not fit for the
usual purposes for which such merchandise is used, or if the seller
normally offers the substituted merchandise at a price lower than the
price of the merchandise ordered.
j. (i) in the case of an order for merchandise placed by telephone or
by electronic means, accept an additional fee for expedited mailing or
shipping, which is in excess of the lowest charge the seller would
accept, in the regular course of business, for mailing or shipping of
the merchandise ordered, when the seller does not reasonably expect such
merchandise to be mailed or shipped within the next three business days
after the order was placed, unless:
(A) the seller notifies the buyer, at the time the order is placed but
before payment is accepted, that the seller anticipates that the
merchandise will not actually be mailed or shipped within the next three
business days after the order is placed; or
(B) the seller contacts the buyer, by telephone or by electronic
means, within the next three business days after the order was placed to
inform the buyer:
(a) that the mailing or shipping of the merchandise ordered is not
reasonably anticipated to occur within the next three business days
after the order was placed;
(b) of the date the seller reasonably anticipates the merchandise
ordered to be mailed or shipped;
(c) that, at the buyer's option, the buyer may:
(1) accept the reasonably anticipated delay in mailing or shipping; or
(2) cancel the order and refund payment to the buyer within thirty
days; or
(3) elect to have the merchandise ordered mailed or shipped in the
regular course of business and refund the additional fee for expedited
mailing or shipping to the buyer within thirty days; and
(d) that, if the seller does not receive a response on the next busi-
ness day, the seller will mail or ship the merchandise ordered, in the
manner originally requested by the buyer. Provided, however, that should
the buyer contact the seller before the merchandise ordered has been
mailed or shipped, nothing in this section shall be construed to
preclude the seller from agreeing to any modifications to the buyer's
order which are agreed to by both the buyer and seller.
(ii) (A) For the purposes of this subdivision, a seller shall be
considered to have mailed or shipped a buyer's merchandise when the
seller causes such merchandise, and applicable postage or shipping fee,
S. 392 5 A. 1031
to be physically placed in the possession of the United States Postal
Service or other carrier. Nothing in this section shall impose any
liability on the seller for delays solely attributable to the postal
service or carrier.
(B) A statement or notice contained in the advertising material for
the merchandise, in a description of the merchandise, or in a
description of the mailing and shipping options available to the buyer,
which advises the buyer of the approximate time the seller reasonably
anticipates the merchandise to be mailed or shipped, shall satisfy the
notification requirements of this section.
4. Whenever there shall be a violation of this section, an application
may be made by the attorney general in the name of the people of the
state of New York to a court or justice having jurisdiction to issue an
injunction, and upon notice to the defendant of not less than five days,
to enjoin and restrain the continuance of such violations; and if it
shall appear to the satisfaction of the court or justice that the
defendant has, in fact, violated this section, an injunction may be
issued by such court or justice, enjoining and restraining any further
violation, without requiring proof that any person has, in fact, been
injured or damaged thereby. In any such proceeding the court may make
allowances to the attorney general as provided in section eighty-three
hundred three, subdivision six of the civil practice law and rules, and
direct restitution. In connection with any such proposed application,
the attorney general is authorized to take proof and make a determi-
nation of the relevant facts and to issue subpoenas in accordance with
the civil practice law and rules.
S 2. This act shall take effect on the first of November next succeed-
ing the date on which it shall have become a law.