2006 Legislative Report from the
NYS Assembly Committee on
|Sheldon Silver, Speaker • Audrey I. Pheffer, Chair • November 2006|
As Chair of the Assembly Consumer Affairs and Protection Committee, I am pleased to report the results of a very successful legislative session. Among the Committee’s top priorities were protecting consumers from identity theft and implementing consumer protections for wireless telephone customers.
This year the Committee advanced several privacy initiatives that have been enacted into law, including legislation allowing consumers to “freeze” their credit files to guard against identity theft. The Committee also took affirmative steps to protect consumers from price gouging.
I am very proud of these and many other accomplishments. The Committee on Consumer Affairs and Protection will continue to pursue its goal of protecting consumers throughout all of New York State.
Identity Theft Protections
Enacted into Law
The Committee, along with the Committee on Governmental Operations, advanced a comprehensive package of legislation to substantially strengthen the state’s laws to protect residents from becoming victimized by identity theft. Four of these important measures have been enacted into law.
Identity thieves can cause significant damage when they open new credit accounts and loans in the names of their victims. In order to provide identity theft victims, and those who are concerned that they may become victims, with the ability to cut off an identity thief’s access to credit, loans, leases, and goods and services, Assemblywoman Pheffer sponsored A.7349-D, which the Legislature passed, and the Governor signed into law as Chapter 63 of the Laws of 2006. This new law will allow consumers to “freeze” their credit reports to guard against identity theft. Security freezes allow consumers to prohibit access to the personal information maintained in their credit reports, thereby preventing identity thieves from taking out new loans and credit in a consumer’s name. This powerful new tool in the fight against identity theft became effective on November 1, 2006.
Privacy Protections for Social Security Numbers
It has been well-documented that the widespread pubic exposure of personal information, especially Social Security numbers, plays a significant role in identity theft. To address this issue, the Legislature passed, and the Governor signed, A.10076-D (Pheffer). This new law will prohibit businesses and others from making an individual’s Social Security number available to the general public, restrict businesses from printing an individual’s number on mailings or other communications, ban businesses from using an individual’s number as means of access to services, products, or benefits, and require that only necessary employees have access to number information (Chapter 676 of the Laws of 2006).
The Anti-Phishing Act of 2006
One of the most prevalent forms of identity theft is commonly referred to as “phishing.” Phishing fraudsters send e-mails or pop-up messages designed to trick consumers into divulging personal information such as account passwords, account numbers, credit card numbers, Social Security numbers, or other sensitive information. To protect consumers from phishing scams, the Legislature passed, and the Governor signed, A.8025-C (Brodsky). This new law will provide additional means for the prosecution of identity thieves engaged in this deceptive activity (Chapter 64 of the Laws of 2006).
Disposal of Records Containing Personal Information
In a practice known as “dumpster diving,” identity thieves sort through the trash of businesses to collect Social Security numbers, financial account numbers, and other personal information that could be used to commit identity theft. In order to ensure that businesses dispose of sensitive information in a responsible manner, the Legislature passed, and the Governor signed, A.8456-B (Pheffer). This new law will require businesses to take appropriate steps when disposing of personal information, including shredding records before disposal, destroying personal information contained in the record before disposal, or redacting personal information before disposal (Chapter 65 of the Laws of 2006).Debit Card Holds
High gasoline prices have left consumers more vulnerable than ever to “holds” placed on their bank accounts by some gas retailers and financial institutions to ensure payment when a debit card is used without a Personal Identification Number (PIN). These additional withdrawals – as high as $75 – can take several days to clear, leaving consumers at risk of drawing upon insufficient funds and bouncing checks. In order to protect consumers from unknowingly incurring disruptive and costly overdraft fees, the Assembly passed A.9130-B (Nolan). This bill would require gas stations that place debit card holds to post a notice informing customers of their hold policy. Stations that allow customers to use a debit card would be required to post a notice informing customers that the bank that issued their debit card may place a hold against their account.Free Trial Offers
Free trial offers can be a good deal for consumers. Some offers, however, fail to clearly disclose a consumer’s obligation to cancel during the “risk free” period. This can lead to situations where consumers are charged for goods or services they did not intend to purchase. In order to ensure that consumers are able to make informed decisions regarding free trial offers, the Assembly passed A.8879-D (Pheffer). This bill would require entities offering free trials to clearly and conspicuously disclose the terms of the offer, obtain the express consent of the consumer to accept the offer, and provide adequate notice to consumers regarding the deadline to cancel a free trial offer, after which a credit card is billed.Document Destruction Contractors
To protect consumers from identity theft, state and federal law requires businesses to exercise responsible care in the disposal of records, such as shredding, burning, or pulverizing records containing sensitive personal information. Many businesses hire specialized contractors to perform this work. In order to ensure that information destroyed pursuant to a documents destruction contract is disposed of properly, the Legislature passed A.11427 (Pheffer). This bill would require businesses that offer document destruction services to register with the Department of State (DOS), thus providing the necessary oversight of this fast-growing industry. This bill was vetoed by the Governor due to a technical flaw. In his veto message, the Governor commended the intent of the bill and directed DOS to work with the Legislature to develop revised legislation next year. The Committee will work with DOS next year to correct the technical flaw identified by the Governor.
Keeping New York’s Children Safe
Public Playground Safety
Parents hope that the playgrounds where their children meet friends, play, and exercise are among the safest places children can spend their time. Unfortunately, that is not always the case and sometimes playgrounds with unsafe conditions contribute to injuries. In order to ensure that public playgrounds in New York meet the highest safety standards, the Legislature passed, and the Governor signed, A.11056-A (Pheffer). This new law will require the Consumer Protection Board to promulgate regulations for the design, construction, installation, inspection, and maintenance of public playgrounds and playground equipment (Chapter 519 of the Laws of 2006).
Yo-yo waterballs consist of a liquid-filled ball on an elastic cord with a small finger loop at the end that allows children to throw the ball, stretch the cord and bounce it back like a yo-yo. Since its emergence in 2003, consumer safety agencies around the world have received numerous complaints from parents reporting various injuries involving the toy, including strangulation, laceration, and eye injuries. The New York State Consumer Protection Board has issued two warnings calling yo-yo waterballs a serious hazard to children and the United States Consumer Product Safety Commission (CPSC) has received over 400 complaints in the last three years. In order to protect children from this dangerous toy, the Assembly passed A.9048-A (Fields), which would prohibit the sale, import, manufacture, or distribution of yo-yo waterball toys.
Many retailers have voluntarily pulled yo-yo waterballs from their shelves; however thousands of these toys have been sold. Parents are advised to cut the cord off the toy (leaving a squishy ball for children to play with) or throw the toy away.
According to the National Center for Injury and Control (NCIPC), drowning is the second leading cause of unintentional injury-related deaths in children between the ages of one and fourteen nationwide, and the third leading cause of injury-related deaths of children in New York. NCIPC data also shows that twenty-six infants and children under fourteen drowned in New York State in 2002 alone. In order to prevent drowning-related deaths, the Legislature passed, and the Governor signed, A.11799 (Fields), which would require the installation of pool alarms in newly constructed or modified commercial and residential swimming pools. Technological advances have produced several different types of pool alarms designed to sound a warning if a child falls into the water. When used in conjunction with barriers currently required by New York state building regulations, pool alarms provide greater protection against accidental pool drowning incidents (Chapter 450 of the Laws of 2006).
The Assembly also passed legislation that would require sellers and installers of swimming pools to provide enhanced notice to consumers of the swimming pool barrier requirements contained in the Residential Code of New York State and to provide consumers with a copy of the applicable section of the Code upon request (A.9475-A, DelMonte).
Wireless Telephone Consumer Protection Act
Complaints related to wireless telephone service topped the list of nationwide consumer complaints received by the Council of Better Business Bureaus in 2005 and the list of complaints to the New York State Consumer Protection Board. With more consumers using wireless phones as their sole method of telecommunication and in the absence of meaningful federal oversight, it is important that the State take action to protect consumers. In order to ensure that consumers are able to make informed decisions and receive quality service, the Assembly passed the Wireless Telephone Consumer Protection Act (A.8539-A, O’Donnell). This bill would require wireless service providers to provide customers with detailed coverage maps, written disclosure of all fees and charges and clearly organized billing statements. The bill also would require wireless providers to allow consumers to cancel service without penalty up to fifteen days after receiving their first bill. This would provide consumers with the ability to review their first bill and determine if they are satisfied with the quality and monthly cost of service based on their actual usage.
Magazine subscribers are constantly bombarded with renewal notices, regardless of how many issues still remain as part of their current subscription. Very often, these notices lead consumers to believe that their subscription will run out soon, causing an interruption of service. In addition, magazine publishers are currently allowed to direct consumers to coded dates in the mailing label to obtain the expiration date of their subscription in any written offer to renew. Many consumers do not read the fine print and renew, resulting in months and even years of pre-paid issues.
In order to reduce the occurrence of unnecessary renewals, the Legislature passed, and the Governor signed, A.9595 (Pheffer). This bill, signed into law as Chapter 204 by the Governor on July 26, 2006, will require publishers to provide magazine subscribers with enhanced disclosure of the month and year in which their subscription expires in any written renewal invitation.
RFID Privacy Task Force
Radio frequency identification (RFID) systems use radio waves or other wireless means to transmit the identity of an object or person from a tag or chip to a reader. RFID tags are now small and inexpensive enough to be embedded in consumer products, and several major retailers are moving rapidly to add RFID tags to products they sell. This new technology has several privacy implications, including the potential for the tracking of movements of a person who possesses or handles objects containing RFID tags and the profiling of citizens without their consent.
To address this emerging privacy issue, the Assembly passed A.9506-B (Pheffer). This bill would establish a task force that would assess various privacy issues associated with the use of RFID by public and private entities and determine the need for the State to regulate this technology in order to ensure personal privacy.
Unsolicited advertisements sent to telefacsimile (“fax”) machines are an intrusive annoyance. New York State and federal law both prohibit the sending of unsolicited advertisements to a fax machine unless the recipient has an existing business relationship with the sender. Unlike the federal law relating to unsolicited faxes, New York law allows for the transmission of faxes during the overnight hours. In order to eliminate this loophole and conform New York law to federal law, the Legislature passed, and Governor signed, A.11554 (Magee), which will remove the exemption for the transmission of unsolicited advertisements between the hours of 9:00 p.m. and 6:00 a.m. (Chapter 277 of the Laws of 2006).
Senders of fax advertisements are required to include contact information and a method for consumers to opt-out of receiving future advertisements. Businesses must remove your number from their marketing list upon request. If you receive an unsolicited fax or a fax from someone with whom you do not have an existing business relationship, you may file a complaint with the Federal Communications Commission online at: www.fcc.gov/cgb/complaints.html, or by calling 1-888-225-5322.
Audrey I. Pheffer, Chair
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