NY State Senate Bill 2021-S1781

Archive: Last Bill Status - In Senate Committee Consumer Protection 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
Jan 05, 2022	referred to consumer protection
Jan 15, 2021	referred to consumer protection

2021-S1781 (ACTIVE) - Details

See Assembly Version of this Bill:: A3889
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §394-c, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S6300, A8196
2023-2024: S1759, A1057

2021-S1781 (ACTIVE) - Summary

Relates to how online dating services handle fraudulent members.

2021-S1781 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S1781

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to amend the general business law, in relation to online dating
services

 
PURPOSE OR GENERAL IDEA OF BILL:

To protect New York users of online dating services from fraud and
abuse.

 
SUMMARY OF PROVISIONS:

Section 1: Amends section 394-c of the general business law to add defi-
nitions of "online dating service," "banned member," "fraud ban," and
"New York member."

Clarifies that certain contractual restrictions on social referral
services do not apply to online dating services with initial contract

terms of a year or less.

Clarifies that certain provisions relating to social referral services
shall not apply to online dating services that are generally available
to users on a national or global basis.

Requires that an online dating service shall disclose cautionary infor-
mation to all of its New York members known to have previously received
and responded to an on-site message from a banned member in order to
prevent the members of an online dating service from being victimized by
banned members.

Section 2: Effective date.

 
JUSTIFICATION:

Many of New York's law on "social referral services" was created in age
before the rise of online dating platforms such as Match and E-Harmony
fundamentally changed the way that most New Yorkers utilize such refer-
ral services. As such, the time is ripe for updating aspects of the law
to better protect New Yorkers who use these services from fraud and
abuse. Each year, internet dating services ban millions of members, the
vast majority of whom are banned within 72 hours of creating an account
with the service when it became clear they were violating one or more
terms of use, or because the service determined the member poses a risk
of defrauding another member. Many New York members of online dating
services have lost significant financial amounts to people using Inter-
net dating services to defraud members.

This act will protect New York users of online dating services by
permitting an online dating service to disclose in a timely manner
important information about banned members to New York members of the
service, will protect online dating services from liability to members
for disclosing the information required by this act and will protect New
York consumers and other members of online dating services by permitting
an online dating service to notify its New York members when there is a
significant change to the New York member's account information.

 
PRIOR LEGISLATIVE HISTORY:

2020 - S6300 Referred to Consumer Protection

Assembly

2020 - A8196 Referred to Consumer Affairs and Protection

 
FISCAL IMPLICATIONS:

None to the state

 
EFFECTIVE DATE:
This act shall take effect on the 60th day after it shall have become a
law.

2021-S1781 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1781
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 15, 2021
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- 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  online  dating
   services
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Section 394-c of the general business law,  as  amended  by
 chapter 468 of the laws of 1996, is amended to read as follows
   §  394-c.  Limitations  on certain contracts involving social referral
 services.  1. As used in this section, the following  terms  shall  have
 the following meanings:
   (a)  "social  referral  service"  shall  include any service for a fee
 providing matching of members [of the opposite sex], by use of  computer
 or  any  other  means, for the purpose of dating [and] OR general social
 contact.
   (b) "ancillary services" shall refer to goods or services directly  or
 indirectly  related  to  or to be provided in connection with the social
 referral service process, including  but  not  limited  to  photography,
 grooming,  cosmetology,  dating  etiquette,  dating counseling, or other
 services.
   (C) "ONLINE DATING SERVICE" SHALL MEAN  ANY  SOCIAL  REFERRAL  SERVICE
 WHERE  THE SERVICES ARE OFFERED PRIMARILY ONLINE, SUCH AS BY MEANS OF AN
 INTERNET WEBSITE OR A MOBILE APPLICATION.
   (D) "BANNED MEMBER" SHALL MEAN THE MEMBER WHOSE ACCOUNT OR PROFILE  IS
 THE SUBJECT OF A FRAUD BAN.
   (E)  "FRAUD  BAN"  SHALL  MEAN  WHEN  A MEMBER'S ACCOUNT OR PROFILE IS
 BARRED FROM AN ONLINE  DATING SERVICE BECAUSE, IN THE  JUDGMENT  OF  THE
 SERVICE,  THE  MEMBER  POSES  A SIGNIFICANT RISK OF ATTEMPTING TO OBTAIN
 MONEY FROM OTHER MEMBERS THROUGH FRAUDULENT MEANS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03174-01-1

 S. 1781                             2
 
   (F) "NEW YORK MEMBER" SHALL MEAN A PERSON  WHO  PROVIDES  A  NEW  YORK
 RESIDENTIAL OR BILLING ADDRESS OR ZIP CODE OR IS IN NEW YORK WHEN REGIS-
 TERING WITH THE ONLINE DATING SERVICE.
   2.  No  contract  for social referral service shall require payment by
 the purchaser of such service of a cash price in excess of one  thousand
 dollars.    Services  to be rendered to the purchaser under the contract
 may extend over a period not to exceed  two  years  from  the  date  the
 contract is entered into.  THIS SUBDIVISION SHALL NOT APPLY TO AN ONLINE
 DATING  SERVICE  CONTRACT WHERE THE INITIAL TERM IS ONE YEAR OR LESS AND
 ANY SUBSEQUENT TERMS ARE ONE YEAR OR LESS.
   2-a. No social referral service provider shall require the purchase of
 an ancillary service by a purchaser of a social referral  service  as  a
 condition  of entering into a social referral service contract with such
 provider.
   3. Every contract for social referral service which  requires  payment
 by  the purchaser of such service of a total amount in excess of twenty-
 five dollars shall provide that the seller of such service must  furnish
 to  the  purchaser  a  specified  certain number of social referrals per
 month.  THIS SUBDIVISION SHALL NOT APPLY TO  AN  ONLINE  DATING  SERVICE
 WHERE  THE  USER  CAN  USE  A  SEARCH FUNCTIONALITY OR IS PRESENTED WITH
 POSSIBLE MATCHES.
   4. Every contract for social referral service which  requires  payment
 by  the purchaser of such service of a total amount in excess of twenty-
 five dollars shall provide that in the event that  the  seller  of  such
 service  does  not furnish to the purchaser the specified certain number
 of social referrals for two or  more  successive  months  the  purchaser
 shall  have the option to cancel the contract and to receive a refund of
 all monies paid pursuant to the cancelled contract  with  the  exception
 that  the  seller  shall  be  entitled  to  retain as a cancellation fee
 fifteen per cent of the cash price or a pro rata amount for  the  number
 of  referrals  furnished  to the purchaser, whichever is greater.  Every
 such contract shall set forth in the contract and in the bill of  rights
 the  manner  in which such services provider determines its cancellation
 fee pursuant to this subdivision.  THIS SUBDIVISION SHALL NOT  APPLY  TO
 AN  ONLINE  DATING SERVICE WHERE THE USER CAN USE A SEARCH FUNCTIONALITY
 OR IS PRESENTED WITH POSSIBLE MATCHES.
   5. Every contract for social referral service shall provide  that  the
 seller will not without the prior written consent of the purchaser sell,
 assign  or  otherwise  transfer for business or for any other purpose to
 any person any information and material of a personal or private  nature
 acquired  from  a  purchaser  directly  or  indirectly including but not
 limited to answers to tests and  questionnaires,  photographs  or  back-
 ground information.
   5-a.  Every  contract for a social referral service shall provide each
 purchaser with the unilateral right to place his or  her  membership  on
 hold  for  a  period  of  up  to  one  year; provided, however, that the
 purchaser and social referral service may mutually  agree  to  a  longer
 period  not  to  exceed  two years.   To exercise the   unilateral right
 provided in this subdivision, a purchaser must notify the social  refer-
 ral service provider in writing of his or her intent to do so.
   6.  Every  contract  for social referral service shall provide that at
 the expiration of the contract or at the expiration of services rendered
 by the seller, for  any  reason,  all  information  and  material  of  a
 personal  or  private nature acquired from a purchaser directly or indi-
 rectly including but not limited to answers to tests and questionnaires,
 photographs or background information shall be  [promptly]  returned  by

 S. 1781                             3
 
 the  seller  to  the purchaser by certified mail AND/OR DELETED FROM ANY
 ELECTRONIC STORAGE DEVICES WITHIN A REASONABLE AMOUNT OF TIME.
   7.  (a)  Every contract for social referral service shall provide that
 such contract may be cancelled without a cancellation fee  within  three
 business  days  after  the date of receipt by the buyer of a copy of the
 written contract.
   (b) In every social referral service sale, the seller shall furnish to
 the buyer a fully completed copy of the contract pertaining to such sale
 at the time of its execution, which is in the same language, e.g., Span-
 ish, as that principally used in the oral sales presentation  and  which
 shows  the  date of the transaction and contains the name and address of
 the seller, and in the immediate proximity to the space reserved in  the
 contract  for  the signature of the buyer and in not less than ten-point
 bold face type, a statement in substantially the following form:
 YOU, THE BUYER, MAY CANCEL THIS CONTRACT WITHOUT  ANY  CANCELLATION  FEE
 WITHIN  THREE (3) BUSINESS DAYS AFTER THE DATE OF THIS CONTRACT. SEE THE
 ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT.
   (c) Notice of cancellation shall be delivered by certified  or  regis-
 tered United States mail at the address specified in the contract.
   (d)  At the time the buyer signs the social referral service contract,
 a completed form in duplicate, captioned "NOTICE OF CANCELLATION", which
 shall be attached to the contract and easily detachable, and which shall
 contain in not less than ten-point bold face type the following informa-
 tion and statements in the same language, e.g., Spanish, as that used in
 the contract:
                                    NOTICE OF CANCELLATION
                                    (enter date of transaction)
                                              (Date)
 YOU MAY CANCEL THIS CONTRACT, WITHOUT ANY PENALTY OR OBLIGATION,  WITHIN
 THREE  (3) BUSINESS DAYS AFTER THE DATE OF THIS CONTRACT BY MAILING THIS
 SIGNED AND DATED NOTICE  OF  CANCELLATION  BY  CERTIFIED  OR  REGISTERED
 UNITED STATES MAIL TO THE SELLER AT THE ADDRESS SPECIFIED HEREIN. IF YOU
 CANCEL,  ANY  PAYMENTS  MADE  BY YOU UNDER THE CONTRACT WILL BE RETURNED
 WITHIN TEN (10) BUSINESS DAYS FOLLOWING RECEIPT BY THE  SELLER  OF  YOUR
 CANCELLATION  NOTICE.   TO CANCEL THIS TRANSACTION, MAIL BY CERTIFIED OR
 REGISTERED UNITED STATES MAIL A SIGNED AND DATED COPY OF THIS  CANCELLA-
 TION NOTICE TO:
 (Name of Seller)         NOT LATER THAN _______________
 (Address of Seller)                        (Date)
 ___________________
 
   THIS SUBDIVISION SHALL NOT APPLY TO AN ONLINE DATING SERVICE WHERE THE
 ONLINE  DATING  SERVICE CONTRACT INCLUDES THE STATEMENT REQUIRED BY THIS
 SUBDIVISION IN A CLEAR AND CONSPICUOUS MANNER.
   (e) In every social referral service sale or renewal, the seller shall
 provide each purchaser with a clear and  conspicuous,  separate  written
 notice,  WHICH  MAY BE A CONSPICUOUS AND APPROPRIATELY LABELED HYPERLINK
 FOR AN ONLINE DATING SERVICE, to be known as the "Dating Service Consum-
 er Bill of Rights", which shall contain at least the following  informa-
 tion:
                  Dating Service Consumer Bill of Rights
   1.  No  social  referral service contract shall require the payment by
 you, the purchaser, of an amount greater than one thousand  dollars.  In
 addition, no such contract may extend over a period of time greater than
 two years.

 S. 1781                             4

   2. No social referral service contract shall require you, the purchas-
 er,  to  purchase  a  good  or  service  which is directly or indirectly
 related to the social referral service.  These extra services are  known
 as  ancillary services and, while these ancillary service may be offered
 to  you,  the  law prohibits the seller from requiring that you purchase
 this service as a condition of your social referral service contract.
   3. If your social referral service contract costs  more  than  twenty-
 five  dollars, the seller must furnish a minimum number of referrals per
 month to you. If this minimum amount is not furnished  to  you  for  two
 successive  months,  you  have the option of cancelling the contract and
 receiving a full refund of all the money you paid, less  a  cancellation
 fee  which  cannot  exceed either fifteen percent of the cash price or a
 pro rata amount for the number of referrals furnished to you.
   4. Your social referral service contract  must  specify  the  distance
 which  you,  the  purchaser,  are  willing  to travel to meet any social
 referral. No social referrals shall  be  furnished  where  you  and  the
 referral  live  at a distance greater than the distance specified in the
 contract.
   5. The provider must have an established policy to address  the  situ-
 ation  of  your moving outside the area it services. This policy must be
 explained in your contract.
   6. If any  provision  of  the  social  referral  service  contract  is
 violated, you have the right to bring a court action against the provid-
 er which has violated the contract.
   8.  Every  contract  for  social  referral  service  shall specify the
 distance which the buyer is willing to travel to meet any social  refer-
 ral. No social referral shall be furnished by the seller to the buyer if
 either  the  buyer  or  the social referral reside at a distance further
 than the distance specified in either the buyer's or  social  referral's
 contracts.    THIS SUBDIVISION SHALL NOT APPLY TO ONLINE DATING SERVICES
 THAT ARE GENERALLY AVAILABLE TO USERS ON A REGIONAL, NATIONAL, OR GLOBAL
 BASIS.
   8-a. Every social referral service provider must establish and  admin-
 ister a fair and reasonable policy for the situation in which a purchas-
 er moves to permanently reside at a location outside the service area of
 such  provider.    This  policy  must be set forth in every contract for
 social referral service.   THIS SUBDIVISION SHALL NOT  APPLY  TO  ONLINE
 DATING  SERVICES  THAT ARE GENERALLY AVAILABLE TO USERS ON A NATIONAL OR
 GLOBAL BASIS.
   9. (a) Whenever there shall be a violation of this section an applica-
 tion 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 by a
 special proceeding to issue  an  injunction,  and  upon  notice  to  the
 defendant of not less than five days, to enjoin and restrain the contin-
 uance  of  such violation; 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 the court or justice, enjoining
 and restraining any further violations, 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 paragraph six of subdivision  (a)  of  section  eighty-three
 hundred  three  of the civil practice law and rules, and direct restitu-
 tion. Whenever the court  shall  determine  that  a  violation  of  this
 section  has  occurred, the court may impose a civil penalty of not more
 than one thousand dollars for each violation.   In connection  with  any
 such  proposed  application  the  attorney general is authorized to take

 S. 1781                             5
 
 proof and make a determination  of  the  relevant  facts  and  to  issue
 subpoenas  in  accordance  with  the  civil  practice law and rules, and
 direct restitution.
   (b)  Any  person who has been injured by reason of a violation of this
 section may bring an action in his  or  her  own  name  to  enjoin  such
 violation,  an  action  to  recover  his  or her actual damages or fifty
 dollars whichever is greater, or both such actions.
   (c) In cities having a population over one million, the provisions  of
 this  section  may be enforced concurrently with the attorney general by
 the director of a local or municipal consumer affairs office. In  cities
 having  a  population  over  one  million,  such local entities may also
 require social referral services to be licensed. Such licensing require-
 ments may be promulgated  as  are  reasonably  necessary  to  effectuate
 licensure,  provided,  however,  that  such  localities  may  not impose
 substantive requirements that are inconsistent with or more  restrictive
 than  those  set forth in this section. Any fee for such license may not
 exceed three hundred forty dollars for a two year period.
   10. (A) AN ONLINE DATING SERVICE SHALL DISCLOSE TO ALL OF ITS NEW YORK
 MEMBERS KNOWN TO HAVE PREVIOUSLY RECEIVED AND RESPONDED  TO  AN  ON-SITE
 MESSAGE FROM A BANNED MEMBER:
   (1)  THE USER NAME, IDENTIFICATION NUMBER, OR OTHER PROFILE IDENTIFIER
 OF THE BANNED MEMBER;
   (2) THE FACT THAT THE BANNED MEMBER WAS BANNED BECAUSE, IN  THE  JUDG-
 MENT  OF  THE  ONLINE    DATING SERVICE, THE BANNED MEMBER MAY HAVE BEEN
 USING A FALSE IDENTITY OR MAY POSE A SIGNIFICANT RISK OF  ATTEMPTING  TO
 OBTAIN MONEY FROM OTHER MEMBERS THROUGH FRAUDULENT MEANS;
   (3) THAT A MEMBER SHOULD NEVER SEND MONEY OR PERSONAL FINANCIAL INFOR-
 MATION TO ANOTHER MEMBER; AND
   (4)  A  HYPERLINK TO ONLINE INFORMATION THAT CLEARLY AND CONSPICUOUSLY
 ADDRESSES THE SUBJECT OF HOW TO AVOID BEING DEFRAUDED BY ANOTHER  MEMBER
 OF AN ONLINE DATING SERVICE.
   (B)  THE  NOTIFICATION  REQUIRED  BY PARAGRAPH (A) OF THIS SUBDIVISION
 SHALL BE:
   (1) CLEAR AND CONSPICUOUS;
   (2) BY E-MAIL, TEXT MESSAGE, OR OTHER APPROPRIATE  MEANS  OF  COMMUNI-
 CATION; AND
   (3)  SENT  WITHIN TWENTY-FOUR HOURS AFTER THE FRAUD BAN, OR AT A LATER
 TIME IF THE SERVICE HAS DETERMINED, BASED ON AN  ANALYSIS  OF  EFFECTIVE
 MESSAGING,  THAT  A  DIFFERENT  TIME  IS MORE EFFECTIVE, BUT IN NO EVENT
 LATER THAN THREE DAYS AFTER THE FRAUD BAN.
   (C) AN ONLINE DATING SERVICE SHALL NOT BE LIABLE TO ANY PERSON,  OTHER
 THAN  THE  STATE  OF NEW YORK,  FOR DISCLOSING TO ANY MEMBER THAT IT HAS
 BANNED A MEMBER, THE USER NAME OR IDENTIFYING INFORMATION  OF THE BANNED
 MEMBER, OR THE REASONS FOR THE ONLINE DATING SERVICE'S DECISION  TO  BAN
 SUCH  MEMBER  IN  ACCORDANCE  WITH  THIS  SUBDIVISION.  AN ONLINE DATING
 SERVICE ALSO SHALL NOT BE LIABLE TO ANY PERSON, OTHER THAN THE STATE  OF
 NEW YORK, FOR THE DECISIONS REGARDING WHETHER TO BAN A MEMBER, OR HOW OR
 WHEN TO NOTIFY A MEMBER PURSUANT TO THIS SUBDIVISION.
   (D) THIS SECTION DOES NOT DIMINISH OR ADVERSELY AFFECT THE PROTECTIONS
 FOR ONLINE DATING SERVICES THAT ARE AFFORDED IN 47 USC 230.
   §  2.  This  act  shall take effect on the sixtieth day after it shall
 have become a law.

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Senate Bill S1781

Sponsored By

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

2021-S1781 (ACTIVE) - Details

2021-S1781 (ACTIVE) - Summary

2021-S1781 (ACTIVE) - Sponsor Memo

2021-S1781 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1781

Share this bill

Sponsored By

James Skoufis

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

2021-S1781 (ACTIVE) - Details

2021-S1781 (ACTIVE) - Summary

2021-S1781 (ACTIVE) - Sponsor Memo

2021-S1781 (ACTIVE) - Bill Text download pdf

Comments