§ 369-EE — Prize award schemes

New York § 369-EE

• Jurisdiction: New York
• Law GBS: General Business
• Art. 24-A: Fair Trade Law

Text

§ 369-ee. Prize award schemes. 1. Written disclosure. (a) Unless\nwritten disclosure is made as provided in paragraph (c) of this\nsubdivision, it shall be unlawful for any person, firm or corporation to\noffer a consumer a prize as part of any prize award scheme.\n (b) For purposes of this section, "prize award scheme" shall mean a\npromotion, solicitation, or advertisement either oral, written, or\notherwise for the purchase or lease of a product, real estate, an\ninvestment, services, a membership, or any other item: (i) in which the\noutcome depends in a material degree upon an element of chance,\nnotwithstanding that skill or performance of the consumer may also be a\nfactor therein; (ii) where the consumer is told that he has won or may\nwin a prize or award, or is told that he or she is or may be the winner\nof a contest, or where similar language is used which would lead a\nconsumer to believe that he or she has won or may win a prize or award;\nand (iii) which requires the consumer to do something (including, but\nnot limited to, traveling to a location to accept the prize, listening\nto a sales presentation, submitting one's credit card account number,\nallowing a sales person into one's home or responding orally or in\nwriting).\n (c) Such written disclosure must be furnished to the consumer at the\ntime he is notified of the prize and must be written or printed in a\nsize equal to at least that type used for the standard text on the front\nof the first page of the offer. The written disclosure must clearly and\nconspicuously disclose all of the following: (i) a full description of\nthe exact prize won by the consumer including a list price which does\nnot appreciably exceed the highest price at which substantial sales are\nmade in the offering area; (ii) all material terms and conditions\nattached to the prize; (iii) a statement, where applicable, that the\nconsumer must submit to a sales presentation; (iv) a full description of\nthe product, real estate, investment, services, membership or any other\nitem to be offered for sale, including the price of the least expensive\nand the most expensive item or parcel; (v) a notice that if the consumer\ndecides to purchase any item offered for sale he has three business days\nin which to cancel such sale; and (vi) the odds of winning each prize\nmust be conspicuously disclosed in the same type face, size and boldness\nand adjacent to the most prominent listing of the prizes on the front of\nthe first page of the offer, with the odds stated in arabic numbers and\nidentify the total number of prizes to be given away and the total\nnumber of offerings to be distributed.\n (d) It shall be unlawful to (i) represent that a person is a "winner"\nor has been "selected", or words of similar import when all or a\nsubstantial number of those solicited receive the same "prize" or\n"opportunity" or (ii) deliver, or cause to be delivered, a prize notice\nor offering, which simulates or falsely represents that it is a document\nauthorized, issued or approved by any court, official, or agency of the\nUnited States or any state, lawyer, law firm, or insurance or brokerage\ncompany, or which creates a false impression as to its source,\nauthorization, or approval; or (iii) deliver, or cause to be delivered,\na prize notice or offering which is in the form of, or a prize notice or\noffering which includes, a document which simulates a bond, check or\nother negotiable instrument, whether or not that document contains a\nstatement or some other indication which suggests that it is\nnon-negotiable.\n 2. Right of cancellation. In addition to any other right to revoke an\noffer, the consumer may cancel a sale made as a result of a prize award\nsolicitation until midnight of the third business day after the day on\nwhich he signed a sales agreement. Cancellation occurs when written\nnotice of cancellation is given to the seller. Notice of cancellation,\nif given by mail, shall be deemed given when deposited in a mailbox\nproperly addressed and postage pre-paid.\n 2-a. Prize claims by pay-per-call services. It shall be unlawful for\nany person, firm or corporation to offer a consumer a prize, if in order\nto claim the prize, the consumer must call a pay-per-call service where\nthe charge for such pay-per-call service is greater than the service\ncharge authorized by the appropriate regulatory commission. As used in\nthis subdivision "pay-per-call service" means any telephone service for\nwhich the calling party is assessed, by virtue of completing the call, a\ncharge for which the caller pays a per-call or per-time charge.\n 3. Form of notice. (a) In a sale consummated as a result of or made in\nassociation with a prize award scheme, the seller shall furnish to the\nbuyer (i) a fully completed receipt or copy of any contract pertaining\nto such sale at the time of its execution, which is in the same\nlanguage, e.g. Spanish, as that principally used in the oral sales\npresentation and which shows the date of the transaction and contains\nthe name and address of the seller, and in immediate proximity to the\nspace reserved in the contract for the signature of the buyer or on the\nfront page of the receipt if a contract is not used and in not less than\nten-point bold face type, a statement in substantially the following\nform:\n "YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY\n TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER\n THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE\n OF CANCELLATION FORM FOR AN EXPLANATION OF THIS\n RIGHT."; and\n (ii) at the time the buyer signs the contract or otherwise agrees to\nbuy consumer goods or services from the seller, a completed form in\nduplicate, captioned "NOTICE OF CANCELLATION", which shall be attached\nto the contract or receipt and easily detachable, and which shall\ncontain in not less than ten-point bold face type the following\ninformation and statements in the same language, e.g. Spanish, as that\nused in the contract:\n NOTICE OF CANCELLATION\n (enter date of transaction)\n _________________________________________\n (Date)\nYOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION,\nWITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE.\nIF YOU CANCEL, ANY PROPERTY TRADED IN, ANY PAYMENTS MADE BY YOU UNDER\nTHE CONTRACT OR SALE, AND ANY NEGOTIABLE INSTRUMENT EXECUTED BY YOU WILL\nBE RETURNED WITHIN 10 BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF\nYOUR CANCELLATION NOTICE, AND ANY SECURITY INTEREST ARISING OUT OF THE\nTRANSACTION WILL BE CANCELLED.\nIF YOU CANCEL, YOU MUST MAKE AVAILABLE TO THE SELLER AT YOUR RESIDENCE,\nIN SUBSTANTIALLY AS GOOD CONDITION AS WHEN RECEIVED, ANY GOODS DELIVERED\nTO YOU UNDER THIS CONTRACT OR SALE; OR YOU MAY IF YOU WISH, COMPLY WITH\nTHE INSTRUCTIONS OF THE SELLER REGARDING THE RETURN SHIPMENT OF THE\nGOODS AT THE SELLER'S EXPENSE AND RISK.\nIF YOU DO MAKE THE GOODS AVAILABLE TO THE SELLER AND THE SELLER DOES NOT\nPICK THEM UP WITHIN TWENTY DAYS OF THE DATE OF YOUR NOTICE OF\nCANCELLATION, YOU MAY RETAIN OR DISPOSE OF THE GOODS WITHOUT ANY FURTHER\nOBLIGATION. IF YOU FAIL TO MAKE THE GOODS AVAILABLE TO THE SELLER, OR\nIF YOU AGREE TO RETURN THE GOODS TO THE SELLER AND FAIL TO DO SO, THEN\nYOU REMAIN LIABLE FOR PERFORMANCE OF ALL OBLIGATIONS UNDER THE CONTRACT.\nTO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND DATED COPY OF\nTHIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE, OR SEND A\nTELEGRAM, TO\n(Name of Seller), AT Address of Seller\n__________________ _________________________________\n(Place of Business) NOT LATER THAN MIDNIGHT OF\n__________________\n__________________\n (Date)\nI HEREBY CANCEL THIS TRANSACTION.\n_________________\n (Date)\n ______________________________\n (Buyer's Signature)\nand the seller shall complete both copies by entering the name of the\nseller, the address of the seller's place of business, the date of the\ntransaction, and the date, not earlier than the third business day\nfollowing the date of the transaction, by which the buyer may give\nnotice of cancellation.\n (a-1) In a sale or lease to be consummated as a result of or made in\nassociation with a prize award scheme, the seller shall not employ a\ncourier to pick up and deliver or a courier pick-up and delivery service\nto retrieve a buyer's deposit or payment unless the seller is otherwise\nauthorized to do business in this state in accordance with the\nrequirements of the business corporation law or the not-for-profit\ncorporation law. If the seller fails to comply with this section, the\nbuyer or any other person obligated for any part of the purchase price\nmay cancel the contract or lease at any time by notifying the seller in\nany manner and by any means of his or her intention to cancel.\n (b) In a sale consummated as a result of or made in association with a\nprize award scheme, the seller shall inform each buyer orally, at the\ntime he signs the contract or purchases the goods or services, of his\nright to cancel. Until the seller has complied with this section, the\nbuyer or any other person obligated for any part of the purchase price\nmay cancel the contract by notifying the seller in any manner and by any\nmeans of his intention to cancel. The period prescribed by this\nsubdivision shall begin to run from the time the seller complies with\nthis section.\n (c) A prize award scheme contract or receipt shall not include any\nconfession of judgment or any waiver of any of the rights to which the\nbuyer is entitled under this section including specifically his right to\ncancel the sale in accordance with the provisions of this article.\n (d) This section shall not apply to the use of promotional materials,\ngifts or prizes distributed without charge or expense to any person,\nfirm or corporation.\n (e) This section shall not apply to the use of promotional materials,\ngifts, or prizes by a retail store primarily engaged in the retail sale\nof goods or services for which this type of promotion is incidental and\nwhich requires the customer only to travel to the merchant's regular\nplace of business to receive the gift, prize or award.\n (f) This section shall not apply to the solicitation or\nrepresentations offering a consumer a prize in connection with: (i) the\nsale or purchase of books, recordings, videocassettes, periodicals, and\nsimilar goods through a membership group or club which is regulated by\nthe federal trade commission pursuant to Code of Federal Regulations,\ntitle 16, part 425.1 concerning use of negative option plans by sellers\nin commerce; (ii) the sale or purchase of goods ordered through a\ncontractual plan or arrangement such as a continuity plan, subscription\narrangement, or a single sale or purchase series arrangement under which\nthe seller ships goods to a consumer who has consented in advance to\nreceive the goods and after receipt of the goods is given a reasonable\nopportunity to examine the goods and to receive a full refund of charges\nfor the goods, upon return of the goods undamaged; or (iii) sales by a\ncatalog seller. For purposes of this section, "catalog seller" shall\nmean any entity (and its subsidiaries) or person at least fifty percent\nof whose annual revenues are derived from the sale of products sold in\nconnection with the distribution of catalogs of at least twenty-four\npages, which contain written descriptions or illustrations and sale\nprices for each item of merchandise and which are distributed in more\nthan one state with a total annual distribution of at least two hundred\nfifty thousand.\n 4. Violations. Upon any violation of this section, an application may\nbe made by the attorney general in the name of the people of the state\nto a court or justice having jurisdiction to issue an injunction, and\nupon notice to the defendant of not less than five days, to enjoin and\nrestrain the continuance of the violation. If it shall appear to the\nsatisfaction of the court or justice that the defendant has violated\nthis section, an injunction may be issued by the court or justice,\nenjoining and restraining any further violation, without requiring proof\nthat any person has, in fact, been injured or damaged thereby. In any\nsuch proceeding, the court may make allowances to the attorney general\nas provided in paragraph six of subdivision (a) of section eighty-three\nhundred three of the civil practice law and rules, and direct\nrestitution. Whenever the court shall determine a violation of this\nsection has occurred, it may impose a civil penalty of not more than one\nthousand dollars for each violation. In connection with an application\nmade under this subdivision, the attorney general is authorized to take\nproof and to make a determination of the relevant facts and to issue\nsubpoenas in accordance with the civil practice law and rules.\n 5. Effect of other laws. The obligations imposed by this section shall\nbe in addition to and not in derogation of the requirements of any other\nlaw.\n 6. Applicability. The provisions of subdivisions two and three of this\nsection shall not apply to membership campground operators as defined in\nsection six hundred fifty-one of this chapter.\n