What's happening
This bill prohibits unauthorized third-party charges ("cramming") on telephone and cable bills, establishing strong consumer protections and enforcement mechanisms.
Why it matters
Shifts the burden of proof onto third parties. Companies seeking to add charges to your phone or cable bill must keep and provide clear evidence that you explicitly consented, after being fully informed of all charges—including recurring ones—before you can be billed.
Strengthens consumer recourse and limits liability. If unauthorized or deceptively obtained charges appear, you are not liable for them; they must be removed from your bill as soon as you notify the provider, making it easier for consumers to dispute and resolve “cramming” incidents.
Expands regulatory oversight and enforcement. The Public Service Commission gains clear authority to set rules, require additional verification, and impose penalties on phone and cable companies that fail to comply, increasing accountability in the telecom and cable sectors.
Promotes transparency and informed consent. Third-party service providers must supply a toll-free number and mailing address for billing disputes, guaranteeing that customers have accessible means to resolve unauthorized charges and understand what they are being billed for.
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Who cares
Headline styles
Sponsors
Senator · Senate District 14
No co-sponsors yet.
History
- Referred to energy and telecommunications
- Referred to energy and telecommunications
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2748
2019-2020 Regular Sessions
IN SENATE
January 29, 2019
Introduced by Sen. COMRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT to amend the public service law and the general business law, in relation to consumer protections against cramming
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The opening paragraph of section 92-d of the public service law, as separately amended by chapters 546 and 547 of the laws of 2000, is amended to read as follows:
Each local exchange telephone company shall inform its customers of the provisions of section ninety-two-i of this article, sections three hundred ninety-nine-p [and], three hundred ninety-nine-z and three hundred ninety-nine-pp of the general business law, and article ten-B of the personal property law, as such provisions relate to the rights of consumers with respect to cramming, telemarketers, sellers, the no telemarketing sales call statewide registry and automatic dialing-announcing devices, by means of:
§ 2. The public service law is amended by adding a new section 92-i to read as follows:
§ 92-i. Cramming prohibited. 1. For the purposes of this section, "cramming" means the inclusion and imposition of charges on the invoice or bill of a customer from a telephone corporation at the request of a third party or billing aggregator that (a) were not authorized by the customer, or (b) if authorized, were obtained through misleading or deceptive means.
2. A customer shall not be liable for charges appearing on the invoice or bill of a telephone corporation that are the result of cramming. No charges for any products or services, other than those provided by the telephone corporation, its affiliates, a third party video provider with whom a telephone corporation or its affiliate jointly market services,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06099-01-9
S. 2748 2
or otherwise permitted by law, shall be included on any bill or invoice of a customer, unless the third party requesting the payment of such charges retains and provides upon request valid proof that:
(a) the customer was provided with clear and conspicuous disclosure of all material terms and conditions of the product or service being offered, including but not limited to all initial and recurring charges and the fact that such charges shall appear on the customer's telephone bill;
(b) after receiving clear and conspicuous disclosure as provided in paragraph (a) of this subdivision, the customer explicitly consented to the nature and amount of such charges; and
(c) the third party offering the product or service or an agent of such third party provided the customer with a toll-free telephone number the customer may call and an address to which the customer may write to resolve any billing dispute.
3. Any charges for third party products or services that are included on a bill or invoice by a telephone corporation without the consent of the customer having been obtained as provided in subdivision two of this section shall be void and unenforceable, and shall be removed from the bill or invoice upon notice from such customer.
4. The commission shall supervise and ensure compliance with the provisions of this section, and may promulgate any rules and regulations it deems necessary or desirable to ensure such compliance, including but not limited to any additional requirements for verification of customer orders and any additional standards that third parties or agents must meet to be authorized to receive payment through the inclusion of charges on bills or invoices of telephone corporations. Any failure by a telephone corporation to comply with the provisions of this section may be redressed as provided in subdivision three of section ninety-six of this article or as otherwise authorized by law.
§ 3. The general business law is amended by adding a new section 390- bb to read as follows:
§ 390-bb. Cramming prohibited. 1. For the purposes of this section, "cramming" means the inclusion and imposition of charges on the invoice or bill for telephone service to a customer from a cable television company, as defined in section two hundred twelve of the public service law, that provides telephone service to customers in New York, at the request of a third party or billing aggregator that (a) were not authorized by the customer, or (b) if authorized, were obtained through misleading or deceptive means.
2. A customer shall not be liable for charges appearing on the invoice or bill of a cable television company for telephone service that are the result of cramming. No charges for any products or services, other than those provided by the cable television company, its affiliates, a third party video provider with whom a cable television company or its affiliate jointly market services, or otherwise permitted by law, shall be included on any bill or invoice for telephone service, unless the third party requesting the payment of such charges retains and provides upon request valid proof that:
(a) the customer was provided with clear and conspicuous disclosure of all material terms and conditions of the product or service being offered, including but not limited to all initial and recurring charges and the fact that such charges shall appear on the customer's for telephone service bill;
S. 2748 3
(b) after receiving clear and conspicuous disclosure as provided in paragraph (a) of this subdivision, the customer explicitly consented to the nature and amount of such charges; and
(c) the third party offering the product or service or an agent of such third party provided the customer with a toll-free telephone number the customer may call and an address to which the customer may write to resolve any billing dispute.
3. Any charges for third party products or services that are included on a bill or invoice for telephone service by a cable television company without the consent of the customer having been obtained as provided in subdivision two of this section shall be void and unenforceable, and shall be removed from the bill or invoice upon notice from such customer.
§ 4. Subdivision 1 of section 227-a of the public service law, as added by chapter 83 of the laws of 1995, is amended to read as follows:
1. Every cable television company, and all officers, agents and employees of any cable television company shall obey, observe and comply with every order, direction or requirement made by the commission, under authority of this article, so long as the same shall be and remain in force. Except as provided in subdivision two of this section, any cable television company which shall violate any provision of this article or section three hundred ninety-bb of the general business law, or which fails, omits or neglects to obey, observe or comply with any order or any direction or requirement of the commission, shall forfeit to the people of the state of New York a sum to be set by the commission not to exceed one thousand dollars for each and every offense; every violation of any such order or direction or requirement, or of this article or section three hundred ninety-bb of the general business law, shall be a separate and distinct offense, and, in case of a continuing violation, every day's continuance thereof shall be a separate and distinct offense.
§ 5. This act shall take effect on the one hundred eightieth day after it shall have become a law. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public service law and the general business law, in relation to consumer protections against cramming
Purpose or general idea of bill
This bill will prohibit the practice of "cramming" the addition of charges on a telephone bill by a third party without the informed consent of the consumer.
Summary of specific provisions
§ 1 amends, § 92-d of the Public Service Law (PSL) to add consumer protections against cramming to the list of PSL consumer safeguards that customers must be informed of by local exchange telephone companies.
Read the full memo (778 words)
§ 2 adds a new PSL § 92-i prohibiting the practice of cramming. "Cram- ming" is defined as the inclusion or imposition of charges on a tele- phone bill at the request of a third party that were not authorized by the customer or, if authorized, were obtained through misleading or deceptive means. Charges for goods or services (other than those provided by the telephone company or its affiliates) may be billed only if the customer explicitly consented to the nature and amount of such charges after having received clear and conspicuous disclosure of all terms and conditions. In addition, the third party or its agent must provide the customer with a toll-free number and address for resolution of any billing dispute. Any charges imposed without the consumer's consent having been obtained as provided above are declared void and unenforceable, and the telephone corporation is repaired to remove them upon notice from the customer that such charges ware not authorized.
The Public Service Commission shall supervise and ensure compliance with § 92-a, and may adopt any necessary rules and regulations, which may include additional requirements for verification of customer orders and standards third parties must moot to be authorized to request inclusion of charges on telephone bills, Any failure to comply by a telephone corporation may be addressed through the complaint process in PSL 96(3) or by any other legal means.
§ 3 amends the General Business Law by adding a new section 390-bb applying the same prohibitions found in § 2 to cable television compa- nies, many of which operate telephone services. The cramming provisions in this section only apply to telephone service provided by a cable television company, and not any other services such companies offer. This section also rests enforcement powers with the Public Service Commission.
§ 4 enables the Public Service Commission to enforce the provisions of this act as related to telephone service offered by cable television companies.
§ 5 sets forth the effective date.
Justification
New York and other states have recently seen a resurgence of "cramming" complaints. Cramming refers to the inclusion on a telephone bill of unauthorized, deceptive or misleading third-party fees or charges. These charges are often added indirectly through a billing warehouse and can be described in vague terms such as "enhanced services," "access," "activation," or minimum usage fees." Consumers can become cramming victim through sweepstakes or contest entry forms, calling "900" numbers, answering advertisements for information or entertainment services that are available, and accepting free offers that trigger an automatic sign-up for as service such as "voice mall" along with a monthly service fee. Company telemarketers may offer a free trial with- out explaining the steps the consumer would have to take to avoid future charges, or may even doctor tape recordings to make it appear that consumers had agreed to pay far services when in actuality they did not. Because their monthly bills are often larger and many pages longer than residential customers, mall businesses are frequent targets of crammers.
Since the 1990s, Federal and State agencies have tried to address this issue by working with the telecommunications industry to enact voluntary guidelines to combat the practice. The New York Attorney General's office has also negotiated settlement agreements with some of the larger telephone companies to address consumer complaints. However, these sidelines and agreements have only been partially effective, and require constant vigilance and substantial effort by consumers to guard against fraud. For every telephone customer who detects and successfully fights an unauthorized charge, there are many others who pay for them, month after month without being aware of the scam.
This bill is a proactive effort to prevent the addition of fraudulent charges to consumers bills in the first place, to provide consumers with the needed tools to contest instances of cramming, and to ensure that the burden of proof is on the company seeking to add fees and charges, and not on individual consumers.
Prior legislative history
S.3202-A of 2017-18.
Fiscal implications
None.
Effective date
Shall take effect on the 180th day after enactment.
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