BILL NUMBER: S145

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the general business law, in relation to providing
notice of certain scams when selling gift cards

 
PURPOSE OR GENERAL IDEA OF BILL:

To require businesses to post notice alerting customers about gift card
scams. SUMMARY OF PROVISIONS:

  Section 1 amends section 396-i of the general business law by adding a
new subdivision 2-b. Subdivision 2-b, paragraph (a) states that no busi-
ness  or  store  can let individuals purchase gift cards unless a notice
alerting customers about gift card scams. Paragraph (b) states that  the
notice  can  be displayed two ways, with subparagraph (i) stating if the
business has an electronic paying system, the notice may be displayed on
the screen prior to finalizing the purchase and subparagraph (ii)  stat-
ing  if the business does not have a electronic screen, the notice shall
be posted in the location where the sale occurs.
              

  Section 2 is the effective date.

 
JUSTIFICATION:

The number of scammers using gift cards as a mechanism to  obtain  money
is  steadily  growing.  According  to  a 2018 AARP report, 26 percent of
scammers used gift cards  as  their  main  way  to  con  consumers  into
payment,  which  was  an  increase  7 percent that used them in 2015(1).
These scams are often phone calls targeting consumers, particularly  the
elderly  and  immigrants,  stating  that they owe money where payment is
required by gift card. These individuals purchase the gift cards due  to
being  unaware they are being scammed and believe they will be penalized
if they do not comply.

The increasing amounts of these scams prompted Consumer Reports and  the
Public Service Commission to issue statements about the warning signs of
gift  card  scams(2).  Despite  these  public service announcements from
Consumer Reports and the Public Service Commission,  consumers  continue
to be taken advantage of by gift card scams.

This  bill  would  require  stores  where  gift cards are sold to post a
notice alerting customers to protect themselves from  gift  card  scams.
By requiring a warning message for consumers, it will reduce the success
rate  of  these scammers. The warning message will help all customers be
more aware of gift card scams, and will encourage  vulnerable  customers
to alert law enforcement if they believe they are being scammed.

 
PRIOR LEGISLATIVE HISTORY:

2020:  S.7905 (Thomas)/A.9855 (Paulin) - Referred to Consumer Protection
Committee.

 
FISCAL IMPLICATIONS:

None noted to the State.

 
EFFECTIVE DATE:
This  act  shall  take  effect  on the ninetieth day after it shall have
become a law.

                                 
BILL NUMBER: S145A

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the general business law, in relation to providing
notice of potential scams when selling gift cards

 
PURPOSE OF BILL:

To require businesses to post a notice alerting customers about gift
card scams.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 396-i of the general business law by adding a
new subdivision 2-b, which provides that no business shall sell a gift
card unless there is a conspicuous notice posted alerting customers
about gift card scams.

Section 2 provides the effective date.

              

 
JUSTIFICATION:

The number of scammers using gift cards as a mechanism to obtain money
is steadily growing. According to a 2018 AARP report, 26 percent of
scammers used gift cards as their main way to con consumers into payment
(1). These scams are often phone calls targeting consumers, particularly
the elderly and immigrants, stating that they owe money where payment is
required by gift card. These individuals purchase the gift cards due to
being unaware they are being scammed and believe they will be penalized
if they do not comply.

The increasing amounts of these scams prompted Consumer Reports and the
Public Service Commission to issue statements about the warning signs of
gift card scams (2). Despite these public service announcements from
Consumer Reports and the Public Service Commission, consumers continue
to be taken advantage of by gift card scams.

This bill would require stores where gift cards are sold to post a
notice alerting customers to protect themselves from gift card scams.
By requiring a warning message for consumers, it will reduce the success
rate of these scammers. The warning message will help all customers be
more aware of gift card scams and will encourage vulnerable customers to
alert law enforcement if they believe they are being scammed.

 
PRIOR LEGISLATIVE HISTORY:

A.9855, of 2020, referred to consumer affairs and protection / S.7905,
of 2020, referred to consumer protection.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.
(1)How Gift Card Scams Are Used to Finance Fraud, AARP,
https://www.aarp.oremoneyiscams-fraud/info-2019/ gift-cardfraud.html
(2) Note: Department of Public Service (2017) Governor Cuomo Urges New
Yorkers to Protect Personal Information during the Holiday Shopping
Season. This was first reported by the governor, and reported by the
Department of public service to protect consumers from scammers gaining
personal information or payments through the use of various ways during
the holiday season. An act to amend the arts and cultural affairs law
and the economic development law, in relation to creating the arts and
cultural district