ALBANY, N.Y. (WWTI) — New Yorkers are being alerted regarding new laws goings into effect in the State.
The New York State Division of Consumer Protection and the New York State Department of Financial Services issued an alert to consumers on Tuesday regarding two new laws; one providing protections when purchasing recurring services, and the other to require notification by New York State regulated financial institutions prior to charging any account inactivity fees.
Specifically, under the New York General Business Law, any individual selling automatic renewal programs or continuous services to New Yorkers must provide consumers an easy-to-use cancellation mechanism. Those consumers who purchase these services online must also be permitted to cancel the agreement online at any time.
According to the DFS this applies to “automatic renewal” programs, subscriptions or purchasing agreements that are automatically renewed each term; and “continuous service plans. Both must clearly state the cancellation terms to consumers before entering the agreement.
Secretary of State Rossana Rosado provided insight on the new General Business Law.
““Many consumers complain about companies billing their credit card after they call or go online to cancel their subscription. Some companies make it difficult to cancel or say they have cancelled service, but consumers continue to be billed,” said Rosado. “The new law empowers the Attorney General, on behalf of consumers, to go after companies that automatically renew and charge consumers without adequate notice.”
Additionally in the second law, a new Banking Law, New York State regulated financial institutions that provide an account to a customer, must provide written notification of any pending charges to a customer thirty days prior to charging any fee based on account inactivity.
Department of Financial Services Superintendent Linda A. Lacewell commented on the new Banking Law.
“We’re living in unprecedented times and consumers shouldn’t be penalized for simply not engaging in account transactions, which is exactly what account inactivity fees do, especially given that communities of color are disproportionally adversely affected by the pandemic and resulting economic crisis,” said Lacewell. “This new protection will ensure that New Yorkers, so many of whom are navigating economic uncertainties, aren’t caught off guard and penalized without notice for mere inactivity, and instead have the opportunity to avoid these unnecessary costs.”
If it is believed that a company is not following the new law when offering recurring services, consumers are urged to file a complaint with the Division of Consumer Protection.
If consumers are charged account inactivity fees without the required notice, they are also urged to file a complaint with the Department of Financial Services.