NY State Senate Bill 2013-S7288

Senate Bill S7288

2013-2014 Legislative Session

Prohibits the imposition of any charge or fee on the telephone bill of a consumer when such fee is imposed by a third party, without the consent of the consumer

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Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 09, 2014	referred to energy and telecommunications

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2013-S7288 (ACTIVE) - Details

See Assembly Version of this Bill:: A1795
Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §§92-d & 227-a, add §92-h, Pub Serv L; add §390-bb, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2009-2010: A10464
2011-2012: A3224, A10256
2015-2016: S1639, A392
2017-2018: S501, S7046, A2426
2019-2020: S2665, A9624

2013-S7288 (ACTIVE) - Summary

Prohibits the imposition of any charge or fee on the telephone bill of a consumer when such fee or charge is imposed by a third party, unless the consumer explicitly agrees to the nature and amount of such fee or charge; makes the unauthorized imposition of such a fee void and unenforceable; directs the public service commission to enforce such provisions.

2013-S7288 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S7288

TITLE OF BILL:  An act to amend the public service law and the general
business law, in relation to consumer protections against cramming

PURPOSE OR GENERAL IDEA OF BILL:  This bill will prohibit the practice
of "cramming" the addition of charges on a telephone bill by a third
party without the informed consent of the consumer.

SUMMARY OF SPECIFIC PROVISIONS:

§ 1 amends, § 92-d of the Public Service Law (PSL) to add consumer
protections against cramming to the list of PSL consumer safeguards
that customers must be informed of by local exchange telephone
companies.

§ 2. adds a new PSL § 92-g prohibiting the practice of cramming.
"Cramming" is defined as the inclusion or imposition of charges on a
telephone bill at the request of a third party that were not
authorized by the customer or, if authorized, were obtained through
misleading or deceptive means. Charges for goods or services (other
than those provided by the telephone company or its affiliates) may be
billed only if the customer explicitly consented to the nature and
amount of such charges after having received clear and conspicuous
disclosure of all terms and conditions. In addition, the third party
or its agent must provide the customer with a toll-free number and

address for resolution of any billing dispute. Any charges imposed
without the consumer's consent having been obtained as provided above
are declared void and unenforceable, and the telephone corporation is
repaired to remove them upon notice from the customer that such
charges ware not authorized.

The Public Service Commission shall supervise and ensure compliance
with § 92-a, and may adopt any necessary rules and regulations, which
may include additional requirements for verification of customer
orders and standards third parties must moot to be authorized to
request inclusion of charges on telephone bills, Any failure to comply
by a telephone corporation may be addressed through the complaint
process in PSL § 96(3) or by any other legal means.

§ 3 amends the General Business Law by adding a new section 390-bb
applying the same prohibitions found in § 2 to cable television
companies, many of which operate telephone services. The cramming
provisions in this section only apply to telephone service provided by
a cable television company, and not any other services such companies
offer. This section also rests enforcement powers with the Public
Service Commission.

§ 4 enables the Public Service Commission to enforce the provisions of
this act as related to telephone service offered by cable television
companies.

§ 5 sets forth the effective date.

JUSTIFICATION:  New York and other states have recently seen a
resurgence of "cramming" complaints.Cramming refers to the inclusion
on a telephone bill of unauthorized, deceptive or misleading


third-party fees or charges. These charges are often added indirectly
through a billing warehouse and can be described in vague terms such
as "enhanced services," "access," "activation," or minimum usage
fees." Consumers can become cramming victim through sweepstakes or
contest entry forms, calling "900" numbers, answering advertisements
for information or entertainment services that are available, and
accepting free offers that trigger an automatic sign-up for as service
such as "voice mall" along with a monthly service fee.  Company
telemarketers may offer a free trial without explaining the steps the
consumer would have to take to avoid future charges, or may even
doctor tape recordings to make it appear that consumers had agreed to
pay far services when in actuality they did not. Because their monthly
bills are often larger and many pages longer than residential
customers, mall businesses are frequent targets of crammers.

Since the 1990s, Federal and State agencies have tried to address this
issue by working with the telecommunications industry to enact
voluntary guidelines to combat the practice. The New York Attorney
General's office has also negotiated settlement agreements with some
of the larger telephone companies to address consumer complaints.
However, these sidelines and agreements have only been partially
effective, and require constant vigilance and substantial effort by
consumers to guard against fraud. For every telephone customer who
detects and successfully fights an unauthorized charge, there are many
others who pay for them, month after month without being aware of the
scam.

This bill is a proactive effort to prevent the addition of fraudulent
charges to consumers bills in the first place, to provide consumers
with the needed toots to contest instances of cramming, and to ensure
that the burden of proof is on the company seeking to add fees and
charges, and not on individual consumers.

PRIOR LEGISLATIVE HISTORY:  A. 10464-B of 2010 - readmitted to ways
and means; S.7082-B recommitted to finance; A. 3224-B of 2011 - passed
Assembly, delivered to Senate, referred, to energy and
telecommunications; A.  10256 of 2012 passed Assembly, delivered to
Senate, referred to rules.

FISCAL IMPLICATIONS:  None.

EFFECTIVE DATE:  Shall take effect on the 180th day after enactment.

2013-S7288 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7288

                            I N  S E N A T E

                               May 9, 2014
                               ___________

Introduced by Sen. ESPAILLAT -- read twice and ordered printed, and when
  printed  to  be  committed to the Committee on Energy and Telecommuni-
  cations

AN ACT to amend the public service law and the general business law,  in
  relation to consumer protections against cramming

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The opening paragraph of section 92-d of the public service
law, as separately amended by chapters 546 and 547 of the laws of  2000,
is amended to read as follows:
  Each  local  exchange  telephone company shall inform its customers of
the provisions of SECTION NINETY-TWO-H OF THIS ARTICLE,  sections  three
hundred  ninety-nine-p  [and],  three  hundred  ninety-nine-z  and three
hundred ninety-nine-pp of the general business law, and article ten-B of
the personal property law, as such provisions relate to  the  rights  of
consumers with respect to CRAMMING, telemarketers, sellers, the no tele-
marketing sales call statewide registry and automatic dialing-announcing
devices, by means of:
  S 2. The public service law is amended by adding a new section 92-h to
read as follows:
  S  92-H.    CRAMMING  PROHIBITED. 1. FOR THE PURPOSES OF THIS SECTION,
"CRAMMING" MEANS THE INCLUSION AND IMPOSITION OF CHARGES ON THE  INVOICE
OR  BILL  OF A CUSTOMER FROM A TELEPHONE CORPORATION AT THE REQUEST OF A
THIRD PARTY OR BILLING AGGREGATOR THAT (A) WERE NOT  AUTHORIZED  BY  THE
CUSTOMER,  OR  (B)  IF  AUTHORIZED,  WERE OBTAINED THROUGH MISLEADING OR
DECEPTIVE MEANS.
  2. A CUSTOMER SHALL NOT BE LIABLE FOR CHARGES APPEARING ON THE INVOICE
OR BILL OF A TELEPHONE CORPORATION THAT ARE THE RESULT OF  CRAMMING.  NO
CHARGES  FOR  ANY PRODUCTS OR SERVICES, OTHER THAN THOSE PROVIDED BY THE
TELEPHONE CORPORATION, ITS AFFILIATES, A THIRD PARTY VIDEO PROVIDER WITH
WHOM A TELEPHONE CORPORATION OR ITS AFFILIATE JOINTLY  MARKET  SERVICES,
OR  OTHERWISE PERMITTED BY LAW, SHALL BE INCLUDED ON ANY BILL OR INVOICE
OF A CUSTOMER, UNLESS THE THIRD PARTY REQUESTING  THE  PAYMENT  OF  SUCH
CHARGES RETAINS AND PROVIDES UPON REQUEST VALID PROOF THAT:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD00356-03-4

S. 7288                             2

  (A) THE CUSTOMER WAS PROVIDED WITH CLEAR AND CONSPICUOUS DISCLOSURE OF
ALL  MATERIAL  TERMS  AND  CONDITIONS  OF  THE  PRODUCT OR SERVICE BEING
OFFERED, INCLUDING BUT NOT LIMITED TO ALL INITIAL AND RECURRING  CHARGES
AND  THE FACT THAT SUCH CHARGES SHALL APPEAR ON THE CUSTOMER'S TELEPHONE
BILL;
  (B)  AFTER  RECEIVING  CLEAR AND CONSPICUOUS DISCLOSURE AS PROVIDED IN
PARAGRAPH (A) OF THIS SUBDIVISION, THE CUSTOMER EXPLICITLY CONSENTED  TO
THE NATURE AND AMOUNT OF SUCH CHARGES; AND
  (C)  THE  THIRD  PARTY  OFFERING THE PRODUCT OR SERVICE OR AN AGENT OF
SUCH THIRD PARTY PROVIDED THE CUSTOMER WITH A TOLL-FREE TELEPHONE NUMBER
THE CUSTOMER MAY CALL AND AN ADDRESS TO WHICH THE CUSTOMER MAY WRITE  TO
RESOLVE ANY BILLING DISPUTE.
  3.  ANY CHARGES FOR THIRD PARTY PRODUCTS OR SERVICES THAT ARE INCLUDED
ON A BILL OR INVOICE BY A TELEPHONE CORPORATION WITHOUT THE  CONSENT  OF
THE CUSTOMER HAVING BEEN OBTAINED AS PROVIDED IN SUBDIVISION TWO OF THIS
SECTION  SHALL  BE VOID AND UNENFORCEABLE, AND SHALL BE REMOVED FROM THE
BILL OR INVOICE UPON NOTICE FROM SUCH CUSTOMER.
  4. THE COMMISSION SHALL  SUPERVISE  AND  ENSURE  COMPLIANCE  WITH  THE
PROVISIONS OF THIS SECTION, AND MAY PROMULGATE ANY RULES AND REGULATIONS
IT DEEMS NECESSARY OR DESIRABLE TO ENSURE SUCH COMPLIANCE, INCLUDING BUT
NOT  LIMITED TO ANY ADDITIONAL REQUIREMENTS FOR VERIFICATION OF CUSTOMER
ORDERS AND ANY ADDITIONAL STANDARDS THAT THIRD PARTIES  OR  AGENTS  MUST
MEET TO BE AUTHORIZED TO RECEIVE PAYMENT THROUGH THE INCLUSION OF CHARG-
ES  ON  BILLS  OR  INVOICES  OF TELEPHONE CORPORATIONS. ANY FAILURE BY A
TELEPHONE CORPORATION TO COMPLY WITH THE PROVISIONS OF THIS SECTION  MAY
BE  REDRESSED  AS PROVIDED IN SUBDIVISION THREE OF SECTION NINETY-SIX OF
THIS ARTICLE OR AS OTHERWISE AUTHORIZED BY LAW.
  S 3. The general business law is amended by adding a new section  390-
bb to read as follows:
  S  390-BB.  CRAMMING  PROHIBITED. 1. FOR THE PURPOSES OF THIS SECTION,
"CRAMMING" MEANS THE INCLUSION AND IMPOSITION OF CHARGES ON THE  INVOICE
OR  BILL  FOR  TELEPHONE  SERVICE  TO A CUSTOMER FROM A CABLE TELEVISION
COMPANY, AS DEFINED IN SECTION TWO HUNDRED TWELVE OF THE PUBLIC  SERVICE
LAW,  THAT  PROVIDES  TELEPHONE SERVICE TO CUSTOMERS IN NEW YORK, AT THE
REQUEST OF A THIRD PARTY OR BILLING AGGREGATOR THAT (A) WERE NOT AUTHOR-
IZED BY THE CUSTOMER,  OR  (B)  IF  AUTHORIZED,  WERE  OBTAINED  THROUGH
MISLEADING OR DECEPTIVE MEANS.
  2. A CUSTOMER SHALL NOT BE LIABLE FOR CHARGES APPEARING ON THE INVOICE
OR BILL OF A CABLE TELEVISION COMPANY FOR TELEPHONE SERVICE THAT ARE THE
RESULT  OF CRAMMING. NO CHARGES FOR ANY PRODUCTS OR SERVICES, OTHER THAN
THOSE PROVIDED BY THE CABLE TELEVISION COMPANY, ITS AFFILIATES, A  THIRD
PARTY  VIDEO PROVIDER WITH WHOM A CABLE TELEVISION COMPANY OR ITS AFFIL-
IATE JOINTLY MARKET SERVICES, OR OTHERWISE PERMITTED BY  LAW,  SHALL  BE
INCLUDED  ON ANY BILL OR INVOICE FOR TELEPHONE SERVICE, UNLESS THE THIRD
PARTY REQUESTING THE PAYMENT OF SUCH CHARGES RETAINS AND  PROVIDES  UPON
REQUEST VALID PROOF THAT:
  (A) THE CUSTOMER WAS PROVIDED WITH CLEAR AND CONSPICUOUS DISCLOSURE OF
ALL  MATERIAL  TERMS  AND  CONDITIONS  OF  THE  PRODUCT OR SERVICE BEING
OFFERED, INCLUDING BUT NOT LIMITED TO ALL INITIAL AND RECURRING  CHARGES
AND  THE FACT THAT SUCH CHARGES SHALL APPEAR ON THE CUSTOMER'S FOR TELE-
PHONE SERVICE BILL;
  (B) AFTER RECEIVING CLEAR AND CONSPICUOUS DISCLOSURE  AS  PROVIDED  IN
PARAGRAPH  (A) OF THIS SUBDIVISION, THE CUSTOMER EXPLICITLY CONSENTED TO
THE NATURE AND AMOUNT OF SUCH CHARGES; AND
  (C) THE THIRD PARTY OFFERING THE PRODUCT OR SERVICE  OR  AN  AGENT  OF
SUCH THIRD PARTY PROVIDED THE CUSTOMER WITH A TOLL-FREE TELEPHONE NUMBER

S. 7288                             3

THE  CUSTOMER MAY CALL AND AN ADDRESS TO WHICH THE CUSTOMER MAY WRITE TO
RESOLVE ANY BILLING DISPUTE.
  3.  ANY CHARGES FOR THIRD PARTY PRODUCTS OR SERVICES THAT ARE INCLUDED
ON A BILL OR INVOICE FOR TELEPHONE SERVICE BY A CABLE TELEVISION COMPANY
WITHOUT THE CONSENT OF THE CUSTOMER HAVING BEEN OBTAINED AS PROVIDED  IN
SUBDIVISION  TWO  OF  THIS  SECTION SHALL BE VOID AND UNENFORCEABLE, AND
SHALL BE REMOVED FROM THE BILL OR INVOICE UPON NOTICE FROM SUCH  CUSTOM-
ER.
  S  4.  Subdivision  1  of  section 227-a of the public service law, as
added by chapter 83 of the laws of 1995, is amended to read as follows:
  1. Every cable  television  company,  and  all  officers,  agents  and
employees of any cable television company shall obey, observe and comply
with every order, direction or requirement made by the commission, under
authority  of  this  article, so long as the same shall be and remain in
force. Except as provided in subdivision two of this section, any  cable
television  company which shall violate any provision of this article OR
SECTION THREE HUNDRED NINETY-BB OF THE GENERAL BUSINESS  LAW,  or  which
fails,  omits  or  neglects to obey, observe or comply with any order or
any direction or requirement of the commission,  shall  forfeit  to  the
people of the state of New York a sum to be set by the commission not to
exceed  one thousand dollars for each and every offense; every violation
of any such order or direction or requirement, or  of  this  article  OR
SECTION  THREE HUNDRED NINETY-BB OF THE GENERAL BUSINESS LAW, shall be a
separate and distinct offense, and, in case of a  continuing  violation,
every  day's  continuance  thereof  shall  be  a  separate  and distinct
offense.
  S 5. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

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Senate Bill S7288

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Sponsored By

Adriano Espaillat