New York State Assembly

1998 Annual Report

Committee on Consumer Affairs
and Protection

Sheldon Silver, Speaker
Audrey I. Pheffer, Chairman



Audrey I. Pheffer
Assemblywoman 23rd District

THE ASSEMBLY
STATE OF NEW YORK
ALBANY

CHAIRPERSON
Consumer Affairs and Protection
Committee

COMMITTEES
Aging
Governmental Employeees
Higher Education
Rules
Tourism, Arts and Sports Development
Veterans Affairs

December 15, 1998 

Honorable Sheldon Silver
Speaker of the Assembly
State Capitol, Room 349
Albany, New York 12248

Dear Speaker Silver:

It is with great pleasure that I forward to you the 1998 Annual Report of the Assembly Standing Committee on Consumer Affairs and Protection.

This was a challenging and productive year for the Committee. The Committee held several public hearings and acted on a number of important bills that protect consumer interests, while at the same time enhance business concerns. Chapter 510 (A.1357-A; Lafayette) was passed as part of the Assembly North Country Ice Storm package to strengthen the scope of the New York State Price Gouging Statute. The Act clarifies that all parties in the chain of distribution of consumer goods would be regulated by the statute and further defines when a court can determine that a price is unconscionably excessive.

Several other changes were made to law this year to help consumers become more informed in the marketplace. Chapter 478 (A.11030-A; Rules/Pheffer) requires retailers of swimming pools to post a sign warning consumers that State and local laws require further fencing and other safety requirements that could increase the total cost of the pool installation.

Also, the Committee reported and the Assembly passed Chapter 176 (A.10694-A; Rules/Pheffer) which provides additional protections for consumers against telemarketers. This Act prohibits the use of special equipment by telemarketers that blocks caller-I.D. information from appearing on a consumer's I.D. box. In this way, consumers can more effectively monitor unwanted intrusions into their personal lives. Chapter 480 (A.10376; Pheffer) further expands a 1997 law to prohibit the use of sweepstakes/prize boxes to collect authorizations to change telecommunications services.

I would like to take this opportunity to thank the Committee members for their continued support. Their contributions have been instrumental to the past year's achievements. I would also like to express my appreciation for the assistance that the Committee received from the Committee staff in the course of our work. Finally, Mr. Speaker, I would like to commend you for your continued leadership and support of our legislative initiatives to better protect New York State consumers.

Sincerely,

Audrey I. Pheffer, Chair
Committee on Consumer Affairs and Protection


1998 ANNUAL REPORT
OF THE
NEW YORK STATE ASSEMBLY
STANDING COMMITTEE ON CONSUMER AFFAIRS AND PROTECTION

AUDREY I. PHEFFER, CHAIR

MAJORITY MINORITY
William F. Boyland Patricia Acampora,
Ranking Minority Member
Joseph Crowley John J. Banacic
Peter J. Abbate, Jr. Pat M. Casale
Sandrea R. Galef  
Audrey G. Hochberg  
Naomi Matusow  
Peter M. Rivera  
Jeffrey Dinowitz  
Jeffrey Klein  

COMMITTEE STAFF

Deborah VanAmerongen, Legislative Coordinator
Christine Von Dohlen, Senior Analyst
Michael Gianaris, Associate Counsel
Maria Toro, Committee Assistant
Margie Gonzalez, Committee Clerk
Kathleen Quackenbush, Program and Counsel Secretary


TABLE OF CONTENTS

I. INTRODUCTION AND SUMMARY
  A. Committee Jurisdiction
  B. Summary of 1998 Committee Action
II. 1998 LEGISLATIVE ACTION
  A. Improving Business Practices
 

1. Price Gouging
2. Senior Citizen Discounts
3. Swimming Pool Disclosure Requirements
4. Rent-to-Own Disclosures

  B. Telecommunications/Telemarketing
 

1. Telemarketers and Caller I.D.
2. Telephone Cramming
3. Do-Not-Call Lists and Telemarketers
4. Unsolicited Telephone Services

  C. Consumer Health and Safety
 

1. Reflective Materials on In-Line Skates
2. Bagged Salads
3. Freshness Dating on Perishable Foods
4. Enhaned Warnings Signs for Tobacco Sales

III. 1998 PUBLIC HEARINGS
  A. Narrow Therapeutic Index Drugs
  B. Food Safety
  C. Personal privacy
  D. Home Improvement Contracts
IV. OUTLOOK FOR 1999
V. APPENDICES
  A. 1998 Bills Passed by the Asembly
  B. Chapters of 1998

 


I. INTRODUCTION AND SUMMARY


A. Committee Jurisdiction

The Assembly Consumer Affairs and Protection Committee (the "Committee") is responsible for developing legislation aimed at protecting consumers' rights and ensuring the public's ability to make informed choices in the marketplace. Generally, the Committee has jurisdiction over legislation that amends sections of the Agriculture and Markets, General Business, Education, and Personal Property Laws. The broad interests of the Committee reflect the fact that today's consumers can be victims of fraud, misinformation, or lack of information that is vital to their health, safety, and welfare.

The Committee works with consumer groups and State and federal agencies. At the State level, these agencies include: the Department of Law, the Consumer Protection Board, the Department of Education, the Department of Environmental Conservation, the Department of Health, the Department of Agriculture and Markets, and the Department of State. The federal government agencies with which the Committee works include: the Federal Trade Commission (FTC), the Food and Drug Administration (FDA), the Federal Communications Commission (FCC), the Consumer Product Safety Commission (CPSC), and the National Highway Traffic Safety Administration (NHTSA). The Committee also works with local agencies, such as the New York City Department of Consumer Affairs, local consumer affairs offices, numerous Better Business Bureaus, and bar associations throughout the State.

In addition, the Committee provides input on behalf of consumers in the development of legislation that is under the jurisdiction of other Assembly standing committees. Such committees include: Transportation; Corporations, Authorities and Commissions; Economic Development, Job Creation, Commerce and Industry; Agriculture; and Insurance.


B. Summary of 1998 Committee Action

The Committee was successful in establishing strong consumer policy during the 1998 Legislative Session, as evidenced by the five bills chaptered into law and the passage of an additional ten consumer bills.

The Committee also held four hearings throughout 1998 to explore and comprehensively analyze certain consumer issues. One such concern involves consumers' lack of control over the accumulation of personal information by outside sources. In order to study the myriad of questions presented by this issue, a hearing was convened on personal privacy matters. Specifically investigated at this hearing were: Internet e-mail, government furnishings of mailing lists to private enterprises for commercial purposes, the status of medical records privacy, ways to provide consumers respite from unwanted telemarketing calls, and how consumers can control their personal information compiled by credit reporting agencies.

In January of 1998, the Committee also held the second of a set of hearings on the safety of and potential need for further oversight in the dispensing of narrow therapeutic index drugs. These hearings solicited testimony in order for the members of the Committee to have informative discussions with various industry representatives from the medical community, including physicians and pharmacists, health maintenance organizations, and pharmaceutical companies.

The Committee also held two other hearings. In February, the Committee convened a hearing with the Assembly Agriculture Committee and the Assembly Task Force on Food, Farm and Nutrition to evaluate the effectiveness of New York State's Food Safety and Quality Programs. In September, the Committee solicited testimony regarding the business practices of home improvement contractors to assess current public policy aimed at protecting consumers from fraudulent practices and to determine better alternatives for resolving disputes between consumers and contractors.


II. 1998 LEGISLATIVE ACTION


A. Improving Business Practices

1. Cracking Down on Price Gouging

The New York State Price Gouging statute was strengthened and clarified in order to protect consumers from price gouging activities such as those experienced by residents of the North Country after the devastating January 1998 ice storm. Other examples of unfair price gouging include: in Central New York this past summer after devastating storms left consumers without electrical power and with millions of dollars in damages; in the petroleum product market following the Exxon Valdez oil spill; and during the military action in the Persian Gulf.

Chapter 510 expands the parties subject to, and the specific activities subject to, New York State's price gouging statute. While the intent of the Legislature in enacting the original statute was clear, there have been problems in its application. In particular, the original definition of "merchant" does not appear to be applicable to the price gouging activities of major oil production companies, the parties with the primary responsibility for the early 1990's increases in gasoline prices.

Further, Chapter 510 clarifies the type of behavior that constitutes a violation and when a price is "unconscionably excessive." The statute was enforced by the Attorney General in People v. Two Wheel Corp., 71 N.Y.2d 693 (1988), a case involving a price mark-up of up to 67% for electric generators following Hurricane Gloria on Long Island in 1985. In finding the seller in violation of the statute, the Court of Appeals held that a price may be unconscionably excessive because, substantively, the amount of the excess is unconscionably extreme, or because, procedurally, the excess was obtained through unconscionable means, or both. This Act addresses this issue.

Another bill was introduced to help consumers fight price gouging during times of emergency and natural disaster. A.8920 (Pheffer) would provide consumers the right to bring businesses to court for violating the price gouging statute. At this time, enforcement is left only to the Attorney General's office, thereby leaving consumers with only a limited recourse against unscrupulous businesses.

This bill was passed by the Assembly, but died in the Senate Consumer Protection Committee.

Chapter 510 of the Laws of 1998 (A.1357-A; Lafayette); (A.8920; Pheffer)

2. Protecting Senior Citizen Discounts

Many firms offer general price discounts for merchandise or services to senior citizens as a regular course of business. Some businesses, however, have attempted to disallow a senior discount when a senior attempts to purchase a product which is already on sale to the general public. Similarly, other seniors have been denied the general discount price because they have been offered the senior discount.

Chapter 553 prohibits the disallowance or discontinuance of an established senior citizen discount on any merchandise, commodity, or service unless proper notice is provided regarding such disallowance or discontinuance.

Chapter 553 of the Laws of 1998 (A.9245-B; Weisenberg)

3. Fully Disclosing Swimming Pool Enclosure Requirements

State regulations and local laws require certain additional safety features when installing certain swimming pools. It is important that consumers are forewarned about any additional expenses that may be incurred because of such requirements.

Usually, the contractor will obtain a building permit for the consumer prior to installing a pool. At this time, a building code officer would confirm that such installation plans include proper fencing and other safety requirements. There have been instances, however, when the pool installer has failed to inform the consumer of such requirements. Thus, the consumer has chosen a particular pool at a certain price without full knowledge of additional required expenses which may drive up the total cost. Unfortunately, it is not until after the installation, or at least after the consumer has entered into a binding contract for installation, that a consumer becomes aware of these additional expenses.

Chapter 478 simply provides needed information to consumers so that an informed decision can be made and further unexpected expenses can be avoided. This Act requires sellers and installers of swimming pools to post conspicuous notice to consumers urging them to contact their local building inspector's office to learn about any fencing and safety requirements.

Chapter 478 of the Laws of 1998 (A.11030-A; Rules/Pheffer)

4. Strengthening Rent-to-Own Disclosures

The U.S. Public Interest Research Group (PIRG) conducted a survey in 17 states on rent-to-own (RTO) businesses in the spring of 1997. They found that RTO stores charge an average financing charge of 100 percent (although not calculated as an annual percentage rate, the cost of purchasing under a rental purchase agreement effectively amounts to this figure). Also among the survey's major findings was that the "cash prices" being charged were significantly above those charged at other retail establishments. Because of these findings and numerous other consumer complaints regarding this industry, the need for additional regulation of the RTO field is apparent. This bill seeks to clarify existing laws, and to provide additional protection to consumers entering into these contracts.

A.9849 (Hochberg) would strengthen and clarify several provisions of existing laws regarding rental-purchase agreements. Specifically, this bill would:

-- establish a standard for the cash price of merchandise;

-- define lease charge as the equivalent of the financing charge, or interest, which is to be paid by the consumer as the cost of entering into a rental-purchase agreement and limit this charge to 25% - the standard now enforced for interest rates on bank loans;

-- provide that upon repossession, the merchant must provide written notice explaining the consumer's right of reinstatement;

-- clarify disclosure requirements for rental lease agreements including: a detailed description of merchandise; the amount due at contract signing; an itemization of the total amount by type and amount, including the down payment, advance periodic payment and security deposit;

-- require disclosure of the total cost to acquire ownership to be the sum of the total amount due at signing, the total amount of periodic payments, and other charges or fees assessed, including the lease charge; and

-- require other disclosures similar to those required by Regulation M of the federal Truth in Lending Act.

This bill was reported from the Consumers Committee and the Codes Committee.

(A.9849; Hochberg)


B. Telecommunications/Telemarketing

1. Preventing Telemarketers from Blocking Caller I.D.

The purpose of caller identification devices is to protect consumers from callers with whom they do not wish to speak. Therefore, telemarketers ought not to be allowed to disguise their identity for the sole reason that many people would opt not to take their calls.

By prohibiting telemarketers from blocking their names and/or telephone numbers on caller identification devices, Chapter 176 helps consumers better monitor and, at the choice of the consumer, greatly reduce unwanted and disruptive telemarketing calls.

Chapter 176 of the Laws of 1999 (A.10694-A, Rules/Pheffer)

2. Preventing Telephone Cramming

Since the enactment of the "prize box" legislation (Chapter 649 of the Laws of 1997), which prohibits the use of prize boxes to collect authorizations for changes in long distance carriers, a new and equally unscrupulous practice has begun to emerge -- the use of prize boxes to trick consumers into adding costly telephone services without the authorization of the consumer, a practice known as "cramming."

Among the problems with the use of prize boxes to collect authorizations for telecommunications services have been: (1) the signature on the authorization form was forged; (2) while the telephone number on the form was that of the complainant, the name was not; and (3) the complainant was unaware that by entering into the sweepstakes or contest that he/she was authorizing the billing of such telecommunications service.

The Attorney General's Office notes that the vast majority of "cramming" complaints it receives involve the use of prize boxes. This Law amends the current statute banning the use of prize boxes to "slam" consumers (use of a prize box to collect authorizations to change long-distance carriers) to also prohibit their use to "cram" consumers.

Chapter 480 was enacted to prohibit "cramming" and to protect consumers from being charged for unwanted services on their monthly phone bills.

Chapter 480 of the Laws of 1998 (A.10376; Pheffer)

3. Requiring Do-Not-Call Lists

More and more, consumers are complaining about unwanted intrusions into their privacy, including unsolicited telemarketing calls. Several surveys demonstrate that consumers are concerned about the invasion of privacy and seek legislative protection.

In response to heightened consumer demand for privacy, Congress enacted the Telephone Consumer Protection Act (47 USC 227 et seq.), which found that the use of the telephone to market goods and services to the home and other businesses is pervasive due to the increased use of cost-effective telemarketing techniques. Furthermore, more than 300,000 telemarketers make more than 18 million calls every day. This federal Act regulates uninitiated telesolicitation by prerecorded voices, unsolicited telefacsimiles and requires telemarketers to keep do-not-call lists.

A recent New York State Small Claims Court decision, Barr v. Times Union Newspaper, however, declared that consumers in the State of New York do not have a private right of action to enforce these federal laws and regulations. According to the decision,

The Telephone Consumers Protection Act...provides for a private right of action in a state court by "a person who has received more than one telephone call within any 12-month period by or on behalf of the same entity in violation of the regulations prescribed" by the Federal Communications Commission under said Act, "if otherwise permitted by the laws or rules of...that State." (italics added)

Unfortunately, the corresponding State law, Section 399-p of the General Business Law, addresses only one prohibited act covered by the federal regulations regarding uninitiated telephone solicitations by prerecorded or artificial voice, and was enacted primarily to regulate automatic dialing devices. In the absence of language in New York State law regarding "Do-Not-Call" lists, telefacsimile machines and other unsolicited advertising, residents of the State lack the ability to enforce federal laws and regulations.

This bill would conform State law with federal statute regarding telemarketing by codifying its provisions and making permanent corresponding federal regulations. In this way, New York State residents will be empowered to enforce laws against telemarketers throughout the nation.

A.10695-B (Rules/Pheffer) was reported from the Consumers Committee and unanimously passed by the Assembly. Unfortunately, the bill died on Third Reading in the Senate.

(A.10695-B, Rules/Pheffer)

4. Preventing Unsolicited Telephone Services

One of the most rapidly growing consumer complaints is the unauthorized third party charge for services or products never used or requested that appear on monthly telephone bills. According to the FCC, this practice, known as "cramming," is bilking consumers out of millions of dollars each year.

Earlier this year, a scam was uncovered in Central New York whereby a calling card company was sending cards to consumers with an automatic enrollment and a negative option. In other words, in order to avoid participation, consumers would have to affirmatively cancel the card received, although such service was never requested. If the consumer failed to read the documentation accompanying the calling card, however, he/she would never have known to do this. In failing to contact the calling card company, a consumer would soon see charges for calling card services on their monthly phone bill.

Furthermore, if an unsolicited calling card were lost or stolen in the mail, it could easily fall into the hands of unscrupulous individuals who would charge significant sums on a consumers telephone bill. Without the requirement that a consumer acknowledge receipt and indicate his/her wish to participate, this practice exacerbates an already troublesome practice.

A.8892-A (Bragman) would explicitly prohibit this particular practice. The bill passed the Assembly, but died in the Senate Rules Committee.

(A.8892-A; Bragman)


C. Consumer Health and Safety

1. Keeping In-Line Skating

According to the U.S. Consumer Product Safety Commission (CPSC), there were an estimated 37,000 accidents involving in-line skating in 1993. Since this time in-line skating accidents have dramatically increased to 76,000 in 1994, 99,500 in 1995 and 102,911 accidents in 1996. 79% of these accidents involved people between the ages of 5 and 24. Between January 1992 and September 1997, 52 deaths had been reported. Of these 52 deaths, 67% involved motor vehicles.

With the increasing number of accidents involving in-line skating, a requirement of reflective material on gear may help avoid some of the tragic incidents that have occurred. Reflective gear will enable drivers to see in-line skaters from a distance and to practice caution. This legislation would increase regulations on in-line skating to the level at which bicycles are regulated in the Vehicle and Traffic Law.

This bill was passed by the Assembly, but died in the Senate Rules Committee.

(A.10278, Pheffer)

2. Making Bagged Salad Consumption Safer

In January of 1998, the California State Attorney General filed suit claiming unsanitary practices against two makers of bagged salads. One of the two companies was linked to an outbreak of E.coli food poisoning in New York, Connecticut, and Illinois.

Some makers of pre-mixed salads actually label their bags with instructions not to wash the contents prior to consumption. According to tests, however, the produce was found to have higher than usual amounts of bacteria. After washing the produce, these same tests showed reduced levels of bacteria.

This bill would require retailers of pre-packaged salads to post a sign which advises consumers to wash such salads, and all produce, prior to consumption. The bill would also provide the phone number and address for the federal Food and Drug Administration so that concerned consumers can contact experts in food safety.

This bill was passed by the Assembly, but died in the Senate Rules Committee.

(A.9890-A, Pheffer)

3. Requiring Freshness Dating on Perishable Foods

At present, there are no Statewide regulations governing date labeling for the sale and storage conditions of perishable foods. As a result, consumers cannot be certain that food offered for sale is fresh or that it will remain fresh for a reasonable period of time after it is purchased.

Voluntary policies of dating the freshness of perishable foods does not appear to work, as evidenced by the fact that many stores in all parts of New York State continue to sell food after freshness dates have expired.

Although federal laws provide safety measures for meat, poultry, and fish freshness, other perishable foods, such as dairy products and baked goods, still lack regulation.

A.3860-B (Dinowitz) is modeled after regulations enforced by the City of New York for the sell-by-dating and storage recommendations of perishable foods. The bill was passed by the Assembly, but died in the Senate Rules Committee.

(A.3860-B, Dinowitz)

4. Enhanced Warning Signs for Tobacco Sales

The sale of tobacco to minors is an on-going problem in our society. Many steps have been taken on all levels of government to restrict children's access to tobacco products and to educate children and teenagers about the dangers of smoking.

A.4744-A (Clark) would increase the minimum size of the lettering from one-half inch to two inches on signs in retail stores which sell tobacco products warning consumers that the sale of such products to persons under the age of eighteen is prohibited. Larger signs with more overt lettering would deter minors from attempting to illegally purchase tobacco products.

This bill was passed by the Assembly, but died in the Senate Rules Committee.

(A.4744-A, Clark)


III. 1998 PUBLIC HEARINGS


A. Greater Oversight of Narrow Therapeutic Index Drugs--January 14, 1998

Chapter 776 of the Laws of 1977 enacted the "Generic Substitution Law" which required the Commissioner of Health to establish a list of drug products which have been determined by the FDA to be safe, effective, and have no bioequivalence problems. It further required pharmacists to substitute a less expensive equivalent prescription drug if the prescriber allows for it. This Act was amended by Chapter 913 of the Laws of 1986, which went further to encourage generic substitution by simplifying the prescription form with verbiage above the signature line reading, "This prescription will be filled generically unless prescriber writes `d.a.w.' in the box below."

It has been suggested that there is a special class of drugs, narrow therapeutic index (NTI) drugs, which require close monitoring of dosage level fluctuations. Legislation was introduced and referred to the Committee which would require a pharmacist to contact the prescriber of a NTI drug before making changes when refilling prescriptions. This reflects the belief that a narrow margin exists between patient benefit and patient risk in the administration of these drugs and that bioequivalency in NTI drugs must be more closely monitored.

In November of 1997, the Consumers Committee convened a joint public hearing with the Assembly Committees on Health and Insurance to solicit testimony on whether the State should take steps to prevent injury to those individuals taking NTI drugs by providing prescribers with closer supervision over prescription refills. The hearing also examined the potential cost which could be incurred by the State and consumers and whether the current prescription system adequately provides necessary safeguards and reasonable costs to consumers.

Due to the intense interest in this issue by so many parties, a second hearing was held in January 1998 to complete testimony. Among those who testified at the second hearing were: the HMO Conference of New York State, Kaiser Permanente/Community Health Plan, the Director of Pharmacy from Vytra Healthcare, the Medical Society of New York State, a Dean from St. John University's College of Pharmacy, the Pharmacists' Society of New York State, the Chairman of the School of Pharmacy of Wilkes University, the Epilepsy Society of New York City, and the director of coronary care of Columbia Presbyterian Medical Center.

Subsequent to the two hearings, A.8087-B (Sanders), which would require greater prescriber oversight before NIT drugs are substituted, was reported from the Committee.


B. Enhancing Food Safety--February 25, 1998

The Assembly has long been concerned about the effectiveness of current food safety programs and whether they should be enhanced to meet the challenges of the next century. In a marketplace where food is transported into the State from the far corners of the globe, new threats to the public can occur at any time. All levels of government and the entire food industry, from grower/farmer to transporter to wholesaler to the retail food store, must work together to maintain consumer confidence. Issues facing the food inspection programs and the public include: new strains of Avian flu from Hong Kong; E.coli and salmonella contamination found in fruit drinks, bagged salads, and tainted meats; and pesticide residues on raw and processed foods.

The Center for Disease Control estimates that disease caused by tainted food kills thousands and sickens millions - perhaps tens of millions - of Americans every year. At the same time, food imports now exceed 30 billion tons annually (double the level of a decade ago) while FDA tests on those imports have fallen to less than 1 percent of the total.

In February, the Committee, along with the Committee on Agriculture and the Task Force on Food, Farm and Nutrition, convened a hearing to examine the status of the State's Food Safety and Quality programs. Those who testified at the hearing included: the New York State Department of Health, the Northeast Organic Farming Association, SYSCO Food Services, the Food Industry Alliance of New York State, the New York Farm Bureau, and the New York Dietician Association.

As a result of the hearing, the Assembly passed a package of food safety initiatives which included A.9890-A (see page 8) and A.3860-B (see page 9) and the following bills:

-- A.6104-A (Gromack), which would create an advisory board within the Department of Agriculture and Markets (DAM) on food safety and inspection programs;

-- A.4091 (Parment), which would require DAM to conduct annual food safety inspection training sessions of at least eight hours;

-- A.4089-A (Parment), which would require DAM to publish a monthly and annual report, and post on the Internet a listing of the disposition of cases involving any violations of the food safety regulations of the Agriculture and Markets Law and the State Sanitary Code;

-- A.2664-A (Nolan), which would impose a penalty upon food retailers who sell or possess food with altered product dates;

-- A.4090 (Parment), which would allow DAM inspectors to examine common carriers transporting food and food products under conditions whereby they may become adulterated; and,

-- A.9898 (Parment), which would require DAM and the Department of Health to develop model Hazard Analysis Critical Control Points (HACCP) plans to identify food safety risks and require distribution of those plans to all restaurants and food stores. The HACCP concept is currently used by the meat and poultry industry to control disease during slaughter and processing.

The Assembly also passed a resolution calling on Congress to revise the proposed United States Department of Agriculture regulations regarding organic foods. The proposed regulations had met with considerable opposition from organic farmers and consumer advocates.


C. Protecting Personal Privacy May 12, 1998

The Assembly has traditionally been a strong advocate for the protection of consumers rights, including the protection of personal privacy. The issue of privacy crosses many subject areas, and thus falls under the jurisdiction of a number of committees and commissions. This hearing was convened by the Assembly Committee on Consumer Affairs and Protection, the Assembly Committee on Oversight, Analysis, and Investigations, and the Legislative Commission of Science and Technology to help develop a comprehensive policy with regard to the accumulation and use of, as well as access to personal information.

As technology has continued to evolve, the potential for the inappropriate action concerning personal information has risen dramatically in recent years. The public is increasingly aware that it has less control than in the past over its personal and sensitive information. Privacy issues includes a number of very broad topics, such as: activities related to the handling of governmental, insurance, financial, health and pharmaceutical records; the theft of identity; credit reporting; and telecommunications (telephone privacy, internet privacy, telemarketers, etc).

While the potential exists for serious misuse and abuse of personal information, there are legitimate reasons for its acquisition and use by government and the private sector. This hearing endeavored to find a balance point between these competing interests.

Those who testified at the hearing included: Consumers Union, New York Public Interest and Research Group, Dun and Bradstreet, Bell Atlantic, two private investigators, the New York State Committee on Open Government, the Associated Credit Bureaus of the United States, the Internet State Coalition, Lexis-Nexis, and the Direct Marketers Association.

Written testimony was submitted by the Federal Trade Commission, U.S. Congressman Maurice Hinchey, the Medical Society of New York State, the Health Association of New York State, the Promotion Marketers Association of America, the U.S. Privacy Council, and the New York Civil Liberties Union.


D. Strengthening Home Improvement Consumer Protections--September 17, 1998

Home improvement repairs have consistently been the subject of one of the most common consumer complaints over the past several years. Consumers complain about having difficulty locating reputable and trustworthy contractors and oftentimes have disputes over the standard of repairs of projects and their costs. Specific examples of consumer complaints include unfinished or poor quality repairs, unexpected charges, untimely repairs, and the performance of repairs that are unauthorized and unnecessary, adding hundreds and sometimes thousands of dollars to home improvement expenses. Although not all such disputes are due to fraud, there is evidence that home improvement scam artists have become more and more effective in their fraudulent practices, bilking consumers out of thousands of dollars each year.

Current New York State law does not require home improvement contractors to be licensed. New York City, as well as several counties and towns, however, do require licensing for home improvement contractors and salespersons. Unfortunately, this patchwork of regulation throughout the State has led to compliance headaches for contractors and inconsistent protection for consumers. This predicament has helped the home improvement industry continue to be one of the easiest targets for con-artists and unqualified contractors who take advantage of homeowners. This problem has made it very difficult for legitimate and professional home improvement contractors and salespersons to gain due respect for honest and quality work.

To further investigate the public policy implications of further regulation of the home improvement industry, the Committee held a hearing in September. Those who testified at the hearing included: the Better Business Bureau of Greater New York, the New York State Builders Association, the Long Island Builders Institute, the Rockland County Department of Consumer Affairs and a consumer who has done extensive research in this area after having personal problems with a contractor.


IV. OUTLOOK FOR 1999

1999 will present a multitude of new challenges for the Committee. Auto leasing continues to be a consumer concern and a priority for the Committee. Also, theft of identity concerns and privacy protections, including Internet protections, will be an issue on which the Committee will focus.

The Committee remains committed to enacting legislation to further protect consumers in credit reporting, telemarketing, food safety, and automobile insurance issues.


APPENDIX A

1998 BILLS PASSED BY THE ASSEMBLY

Bill Number

Sponsor

Description

Bill Status

A.494-B

Weisenberg

Would require sunscreen products to be labeled with expiration dates and storage recommendations.

Senate Rules Committee

A.3754-A

Sullivan, E.

Would declare agreements in form of checks or acceptance of gift which would include consent to change long distance telephone service void and unenforceable.

Senate Rules Committee

A.3860-B

Dinowitz

Would require clear and legible dating along with recommended conditions of storage to ensure freshness of certain perishable foods

Senate Rules Committee

A.4744-B

Clark

Would require that signs stating tobacco sales to minors contain letters at least two inches in height.

Senate Rules Committee

A.8197-B

Rules (Brodsky)

Would require that new computers be sold with only new parts.

Senate Rules Committee

A.8892-B

Bragman

Would make provisions with respect to unsolicited telephone services

Senate Third Reading Calendar

A.8920

Rules (Pheffer)

Would relate to price gouging.

Senate Consumer Protection Committee

A.9890-A

Pheffer

Would require the posting of signs near pre-packaged salads offered for sale notifying consumers of the advisability of washing the produce before consumption.

Senate Rules Committee

A.10278

Pheffer

Would require in-line skates to be equipped with reflective material.

Senate Rules Committee

A.10695-B

Rules (Pheffer)

Would bring State laws on telemarketing and unsolicited advertisements into conformance with federal law and regulations.

Senate Rules Committee




APPENDIX B

CHAPTERS OF 1998

Bill Number

Sponsor

Description

Chapter

A.1357-A

Lafayette

Prohibits price gouging by all parties within the chain of distribution of consumer goods necessary to health, safety and welfare; makes evidentiary provisions for actions pertaining thereto; provides for enforcement by the attorney general.

510

 

A.9245-B

Weisenberg

Makes provisions relating to the limitation or discontinuation of senior citizen discounts.

556

A.10376

Pheffer

Prohibits use of sweepstakes or contest prize boxes to collect authorizations for certain telecommunication services.

480

A.10694-A

Rules (Pheffer)

Prohibits telemarketers from blocking self-identification on the caller identification device of consumer-recipients of their telephone calls.

176

A.11030-A

Rules (Pheffer)

Requires sellers and installers of swimming pools to post a sign containing a notice of possible additional purchase costs due to state or local law requirements.

478


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