Relates to requiring automobile brokers to be licensed and bonded

Title of bill

An act to amend the general business law,in relation to requiring automobile brokers to be licensed

Purpose

To decrease the incidence of unlawful deceptive practices in the automobile broker business by requiring licensure of automobile brokers and mandating increased penalties for any violation of General Business Law article 43, which regulates to automobile broker business.

Summary of provisions

Section one of this bill amends subdivision 1 of the General Business Law section 736 by increasing the threshold for becoming an automobile broker business from at least three ten automobiles a year, and also two amends the General Business Law by adding two new subdivisions to define the terms "Secretary" and "Division." Secretary shall mean the Secretary of State and Division shall mean the Division of Criminal Justice Services.

Section two of this bill adds four new sections to General Business Law article 43. New section 736-a requires that any person or entity engaged in the automobile broker business shall be licensed and maintain a surety bond. New section 736-b establishes the application for an automobile broker license. New section 736-c establishes conditions precedent for obtaining a license. New section 736-d describes the license that will be provided and the licensee's obligations when there are any changes to the location or ownership of the licensee.

Section three of this bill amends General Business Law section 743 concerning enforcement of General Business Law article 43 by the Attorney General to increase the penalties for violating article 43 by mandating that the Court shall impose a civil penalty when it finds a person has violated such article. Additionally, the amount of the civil penalty is increased an amount that is not less than $1,000 and not more than $3,000 per violation.

Section four of this bill provides that this act shall take effect on the ninetieth day after it shall have become a law; provided, however, that the secretary of state shall take actions necessary to provide for the issuance of licenses pursuant to section 736-d of the general business law, as added by section two of this act, prior to such date.

Current law

In a proceeding commenced by the Attorney General for one or more alleged violations of General Business Law article 43, if the Court finds that such article has been violated, the Court may impose a civil penalty of not more than $1,000 per violation.

Justification

The General Business Law requires other businesses that provide goods or services for a fee to be licensed. Examples of these businesses include employment agencies (article 11), private investigators, bail enforcement agents and watch, guard and patrol agencies (article 7), armored car carriers (article 8-B), telemarketers (section 399-pp), and coin processing services (article 27-A). With the advent of the Internet, a consumer can hire an automobile broker in a different city or State. The consumer may pay for broker services in advance without meeting the broker. Requiring licensure automobile brokers, coupled with mandatory and increased penalties for violating General Business Law article 43, which regulates the automobile broker industry, unscrupulous brokers may be deterred from taking advantage of New Yorkers.

Legislative history

New bill

Fiscal implications

None

Effective date

This act shall take effect on the ninetieth day after it shall have become a law; provided, however, that the secretary of state shall take actions necessary to provide for the issuance of licenses pursuant to section 736-d of the general business law, as added by section two of this act, prior to such date.