What's happening
This bill requires money transmitters in New York to provide prominent fraud warnings to consumers before completing fund transfers.
Why it matters
Aims to directly reduce consumer fraud losses. by requiring clear, specific warnings about common scams (like lottery, credit card, or unknown recipient schemes) at the point of money transfer, potentially deterring hasty or uninformed transactions.
Mandates standardized, prominent delivery of warnings. whether online, in-person, or by phone—ensuring that all consumers, regardless of how they send money, receive and can understand the warning before completing a transaction.
Imposes civil penalties for non-compliance. , creating a financial incentive for money transmitters (like Western Union, PayPal, etc.) to consistently implement these consumer protections and prioritize anti-fraud practices.
Exempts certain transactions. (such as indirect transfers and gift certificate purchases) from the warning requirement, focusing the rule on the most fraud-prone scenarios and minimizing unnecessary disruption to routine, low-risk activities.
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Who cares
Money transmission businesses
They would have to give prominent fraud warnings before completing covered transfers, with civil penalties of up to $250 for a first violation and $500 for each subsequent violation.
Consumers sending money by wire or electronic transfer
They would receive warnings about potential scams, along with information on asking questions and stopping a transfer.
Money transfer sales clerks and representatives
The required warnings would tell consumers how to ask them questions, and oral warnings would have to be delivered clearly enough to hear and understand.
Headline styles
Warn Consumers on Money Transfers
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to banks
- Delivered to assembly
- Passed senateVote 48–12
- Advanced to third reading
- 2nd report cal.
- 1st report cal.175
- Referred to banks
- Returned to senate
- Died in assembly
- Referred to banks
- Delivered to assembly
- Passed senateVote 47–14
Show 3 earlier actions
- Ordered to third reading cal.717
- Committee discharged and committed to rules
- Referred to banks
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Warn Consumers of Money Scams
In Assembly Committee · Banks · Sponsor Albert A. Stirpe
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
297
2019-2020 Regular Sessions
IN SENATE (Prefiled)
January 9, 2019
Introduced by Sens. GIANARIS, ADDABBO, KENNEDY, KRUEGER, MONTGOMERY, PARKER, STAVISKY, STEWART-COUSINS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks
AN ACT to amend the banking law, in relation to requiring transmitters of money to provide a certain warning to consumers
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The banking law is amended by adding a new section 652-c to read as follows:
§ 652-c. Required warning. 1. A person engaged in the business of receiving money for transmission or transmitting money by wire or electronic transfer which, at the request of an individual who in person, by telephone or electronic means transmits funds to another person, business or entity, shall clearly and prominently warn the person requesting the transmission prior to completing such transmission of funds. Such warning shall include, but not be limited to, the following information:
(a) a title in bold, capital letters saying "Warning: do not fall victim to consumer fraud.";
(b) questions or information that alert a consumer about the dangers of sending funds for lottery winnings, credit card guarantees or loans, internet or phone offers, to persons unknown to the consumer or persons whose identity the consumer cannot verify and any other fraud alert; and
(c) information about how to ask questions of the sales clerk or representative; and
(d) information about how to stop a transfer.
2. For the purposes of this section, "clearly and prominently" means: (a) in written communications, including print and those made through an electronic medium (such as video and interactive media including, but not limited to, the internet, online services, and electronic mail) the warning shall appear on the same form as the form used to authorize the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03998-01-9
S. 297 2
transmission of funds, shall be in a type size sufficiently noticeable for an ordinary consumer to read and comprehend the written warning and shall be in a type that contrasts with the background against which the written warning appears; and (b) in oral communications, the warning shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend. If any communication is presented solely through oral, written or visual means, the warning shall be made through the same means.
3. The warning required by this section shall not apply to an electronic funds transfer in which funds are not transferred directly to another person and are not available for immediate use, nor shall any warning be required in an electronic funds transfer made with a gift certificate as defined in section three hundred ninety-six-i of the general business law.
4. A violation of the provisions of this section shall be punishable by a civil penalty of not more than two hundred fifty dollars for the first violation and five hundred dollars for each subsequent violation.
§ 2. This act shall take effect on the one hundred eightieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the banking law, in relation to requiring transmitters of money to provide a certain warning to consumers
Purpose or general idea of bill
This bill would require a transmitter of money to provide a warning about potential fraud to consumers.
Summary of specific provisions
Section 1 amends the banking law by adding a new Section 652-c, requir- ing a person engaged in the business of receiving money for transmission or transmitting money to clearly and prominently warn the consumers about potential fraud prior to completing the transfer.
Justification
Consumer fraud hurts everyone regardless of age. The elderly however, are especially vulnerable to scams that call for the transferring of money. People receive calls or emails informing them that they won the lottery, that they have been offered a great deal, or that they can apply for a credit card if they simply transfer funds to an unspecified address. People have lost hundreds of thousands of dollars when they electronically transfer funds to individuals they do not know. This bill would require a financial institution to alert their customers to the dangers of consumer fraud. It would help New Yorkers make better, more informed decisions before participating in risky money transfers.
Prior legislative history
2018: Died in Banks 2017: Died in Banks 2016: Died in Banks 2015: Died in Banks 2014: Died in Finance 2012: Died in Rules
Fiscal implications
None.
Effective date
This act shall take effect on the one hundred eightieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.