New York's consumer protections for Internet purchases

Last Month, the Governor of New York signed into law Senate Bill 4964. The bill was introduced by Senator Fuschillo at the request of Attorney General Andrew Cuomo. The AG requested the bill because of the consumer complaints the office received regarding failure to deliver goods ordered online or other improper conduct related to online purchases.

The law amends Section 396-m of the General Business law to provide Internet consumers the same level of protection as consumers who make purchases over the phone or mail.

Thus, with the new law in place, consumers who make purchases over the Internet or e-mail have the following protections:

• Orders cannot be accepted for merchandise which cannot be reasonably anticipated to be shipped within 30 days.
• All advertising and promotional materials must prominently feature: the legal name of the company, complete street address and details about what conditions in which a refund will be issued.
• If products fail to ship within 30 days, the company must clearly provide the buyer with the opportunity to cancel the order and receive a refund or receive substitute merchandise.
• Companies must maintain records of all complaints of failure to ship merchandise or provide advertised services.

Online businesses that sell to New York consumers should be aware of these new requirements. Paragraph 4 of Section 396-m of the General Business law provides:

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 determination of the relevant facts and to issue subpoenas in accordance with the civil practice law and rules.

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Text of Senate Bill 4964

Introduced by Sen. FUSCHILLO -- (at request of the Attorney General) -- 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 mail-order and telephone-order merchandise

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

Section 1. Paragraphs a and e of subdivision 2 and paragraph b of subdivision 3 of section 396-m of the general business law, as amended by chapter 802 of the laws of 1984, are amended to read as follows:

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, 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.

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 16 and debiting the buyer`s account.

b. accept orders for merchandise which is not reasonably anticipated to be available for shipment within thirty days from the date of receipt 19 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 22 buyer`s account in the case of an order placed by telephone.

S 2. This act shall take effect immediately.