N.Y. General Business Law § 369-ee: Prize award schemes

§ 369-ee. Prize award schemes. 1. Written disclosure. (a) Unless

written disclosure is made as provided in paragraph (c) of this

subdivision, it shall be unlawful for any person, firm or corporation to

offer a consumer a prize as part of any prize award scheme.

(b) For purposes of this section, "prize award scheme" shall mean a

promotion, solicitation, or advertisement either oral, written, or

otherwise for the purchase or lease of a product, real estate, an

investment, services, a membership, or any other item: (i) in which the

outcome depends in a material degree upon an element of chance,

notwithstanding that skill or performance of the consumer may also be a

factor therein; (ii) where the consumer is told that he has won or may

win a prize or award, or is told that he or she is or may be the winner

of a contest, or where similar language is used which would lead a

consumer to believe that he or she has won or may win a prize or award;

and (iii) which requires the consumer to do something (including, but

not limited to, traveling to a location to accept the prize, listening

to a sales presentation, submitting one's credit card account number,

allowing a sales person into one's home or responding orally or in

writing).

(c) Such written disclosure must be furnished to the consumer at the

time he is notified of the prize and must be written or printed in a

size equal to at least that type used for the standard text on the front

of the first page of the offer. The written disclosure must clearly and

conspicuously disclose all of the following: (i) a full description of

the exact prize won by the consumer including a list price which does

not appreciably exceed the highest price at which substantial sales are

made in the offering area; (ii) all material terms and conditions

attached to the prize; (iii) a statement, where applicable, that the

consumer must submit to a sales presentation; (iv) a full description of

the product, real estate, investment, services, membership or any other

item to be offered for sale, including the price of the least expensive

and the most expensive item or parcel; (v) a notice that if the consumer

decides to purchase any item offered for sale he has three business days

in which to cancel such sale; and (vi) the odds of winning each prize

must be conspicuously disclosed in the same type face, size and boldness

and adjacent to the most prominent listing of the prizes on the front of

the first page of the offer, with the odds stated in arabic numbers and

identify the total number of prizes to be given away and the total

number of offerings to be distributed.

(d) It shall be unlawful to (i) represent that a person is a "winner"

or has been "selected", or words of similar import when all or a

substantial number of those solicited receive the same "prize" or

"opportunity" or (ii) deliver, or cause to be delivered, a prize notice

or offering, which simulates or falsely represents that it is a document

authorized, issued or approved by any court, official, or agency of the

United States or any state, lawyer, law firm, or insurance or brokerage

company, or which creates a false impression as to its source,

authorization, or approval; or (iii) deliver, or cause to be delivered,

a prize notice or offering which is in the form of, or a prize notice or

offering which includes, a document which simulates a bond, check or

other negotiable instrument, whether or not that document contains a

statement or some other indication which suggests that it is

non-negotiable.

2. Right of cancellation. In addition to any other right to revoke an

offer, the consumer may cancel a sale made as a result of a prize award

solicitation until midnight of the third business day after the day on

which he signed a sales agreement. Cancellation occurs when written

notice of cancellation is given to the seller. Notice of cancellation,

if given by mail, shall be deemed given when deposited in a mailbox

properly addressed and postage pre-paid.

2-a. Prize claims by pay-per-call services. It shall be unlawful for

any person, firm or corporation to offer a consumer a prize, if in order

to claim the prize, the consumer must call a pay-per-call service where

the charge for such pay-per-call service is greater than the service

charge authorized by the appropriate regulatory commission. As used in

this subdivision "pay-per-call service" means any telephone service for

which the calling party is assessed, by virtue of completing the call, a

charge for which the caller pays a per-call or per-time charge.

3. Form of notice. (a) In a sale consummated as a result of or made in

association with a prize award scheme, the seller shall furnish to the

buyer (i) a fully completed receipt or copy of any contract pertaining

to such sale at the time of its execution, which is in the same

language, e.g. Spanish, as that principally used in the oral sales

presentation and which shows the date of the transaction and contains

the name and address of the seller, and in immediate proximity to the

space reserved in the contract for the signature of the buyer or on the

front page of the receipt if a contract is not used and in not less than

ten-point bold face type, a statement in substantially the following

form:

"YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY

TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER

THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE

OF CANCELLATION FORM FOR AN EXPLANATION OF THIS

RIGHT."; and

(ii) at the time the buyer signs the contract or otherwise agrees to

buy consumer goods or services from the seller, a completed form in

duplicate, captioned "NOTICE OF CANCELLATION", which shall be attached

to the contract or receipt and easily detachable, and which shall

contain in not less than ten-point bold face type the following

information and statements in the same language, e.g. Spanish, as that

used in the contract:

NOTICE OF CANCELLATION

(enter date of transaction)

_________________________________________

(Date)

YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR OBLIGATION,

WITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE.

IF YOU CANCEL, ANY PROPERTY TRADED IN, ANY PAYMENTS MADE BY YOU UNDER

THE CONTRACT OR SALE, AND ANY NEGOTIABLE INSTRUMENT EXECUTED BY YOU WILL

BE RETURNED WITHIN 10 BUSINESS DAYS FOLLOWING RECEIPT BY THE SELLER OF

YOUR CANCELLATION NOTICE, AND ANY SECURITY INTEREST ARISING OUT OF THE

TRANSACTION WILL BE CANCELLED.

IF YOU CANCEL, YOU MUST MAKE AVAILABLE TO THE SELLER AT YOUR RESIDENCE,

IN SUBSTANTIALLY AS GOOD CONDITION AS WHEN RECEIVED, ANY GOODS DELIVERED

TO YOU UNDER THIS CONTRACT OR SALE; OR YOU MAY IF YOU WISH, COMPLY WITH

THE INSTRUCTIONS OF THE SELLER REGARDING THE RETURN SHIPMENT OF THE

GOODS AT THE SELLER'S EXPENSE AND RISK.

IF YOU DO MAKE THE GOODS AVAILABLE TO THE SELLER AND THE SELLER DOES NOT

PICK THEM UP WITHIN TWENTY DAYS OF THE DATE OF YOUR NOTICE OF

CANCELLATION, YOU MAY RETAIN OR DISPOSE OF THE GOODS WITHOUT ANY FURTHER

OBLIGATION. IF YOU FAIL TO MAKE THE GOODS AVAILABLE TO THE SELLER, OR

IF YOU AGREE TO RETURN THE GOODS TO THE SELLER AND FAIL TO DO SO, THEN

YOU REMAIN LIABLE FOR PERFORMANCE OF ALL OBLIGATIONS UNDER THE CONTRACT.

TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND DATED COPY OF

THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE, OR SEND A

TELEGRAM, TO

(Name of Seller), AT Address of Seller

__________________ _________________________________

(Place of Business) NOT LATER THAN MIDNIGHT OF

__________________

__________________

(Date)

I HEREBY CANCEL THIS TRANSACTION.

_________________

(Date)

______________________________

(Buyer's Signature)

and the seller shall complete both copies by entering the name of the

seller, the address of the seller's place of business, the date of the

transaction, and the date, not earlier than the third business day

following the date of the transaction, by which the buyer may give

notice of cancellation.

(a-1) In a sale or lease to be consummated as a result of or made in

association with a prize award scheme, the seller shall not employ a

courier to pick up and deliver or a courier pick-up and delivery service

to retrieve a buyer's deposit or payment unless the seller is otherwise

authorized to do business in this state in accordance with the

requirements of the business corporation law or the not-for-profit

corporation law. If the seller fails to comply with this section, the

buyer or any other person obligated for any part of the purchase price

may cancel the contract or lease at any time by notifying the seller in

any manner and by any means of his or her intention to cancel.

(b) In a sale consummated as a result of or made in association with a

prize award scheme, the seller shall inform each buyer orally, at the

time he signs the contract or purchases the goods or services, of his

right to cancel. Until the seller has complied with this section, the

buyer or any other person obligated for any part of the purchase price

may cancel the contract by notifying the seller in any manner and by any

means of his intention to cancel. The period prescribed by this

subdivision shall begin to run from the time the seller complies with

this section.

(c) A prize award scheme contract or receipt shall not include any

confession of judgment or any waiver of any of the rights to which the

buyer is entitled under this section including specifically his right to

cancel the sale in accordance with the provisions of this article.

(d) This section shall not apply to the use of promotional materials,

gifts or prizes distributed without charge or expense to any person,

firm or corporation.

(e) This section shall not apply to the use of promotional materials,

gifts, or prizes by a retail store primarily engaged in the retail sale

of goods or services for which this type of promotion is incidental and

which requires the customer only to travel to the merchant's regular

place of business to receive the gift, prize or award.

(f) This section shall not apply to the solicitation or

representations offering a consumer a prize in connection with: (i) the

sale or purchase of books, recordings, videocassettes, periodicals, and

similar goods through a membership group or club which is regulated by

the federal trade commission pursuant to Code of Federal Regulations,

title 16, part 425.1 concerning use of negative option plans by sellers

in commerce; (ii) the sale or purchase of goods ordered through a

contractual plan or arrangement such as a continuity plan, subscription

arrangement, or a single sale or purchase series arrangement under which

the seller ships goods to a consumer who has consented in advance to

receive the goods and after receipt of the goods is given a reasonable

opportunity to examine the goods and to receive a full refund of charges

for the goods, upon return of the goods undamaged; or (iii) sales by a

catalog seller. For purposes of this section, "catalog seller" shall

mean any entity (and its subsidiaries) or person at least fifty percent

of whose annual revenues are derived from the sale of products sold in

connection with the distribution of catalogs of at least twenty-four

pages, which contain written descriptions or illustrations and sale

prices for each item of merchandise and which are distributed in more

than one state with a total annual distribution of at least two hundred

fifty thousand.

4. Violations. Upon any violation of this section, an application may

be made by the attorney general in the name of the people of the state

to a court or justice having jurisdiction to issue an injunction, and

upon notice to the defendant of not less than five days, to enjoin and

restrain the continuance of the violation. If it shall appear to the

satisfaction of the court or justice that the defendant has violated

this section, an injunction may be issued by the court or justice,

enjoining and restraining any further violation, without requiring proof

that any person has, in fact, been injured or damaged thereby. In any

such proceeding, the court may make allowances to the attorney general

as provided in paragraph six of subdivision (a) of section eighty-three

hundred three of the civil practice law and rules, and direct

restitution. Whenever the court shall determine a violation of this

section has occurred, it may impose a civil penalty of not more than one

thousand dollars for each violation. In connection with an application

made under this subdivision, the attorney general is authorized to take

proof and to make a determination of the relevant facts and to issue

subpoenas in accordance with the civil practice law and rules.

5. Effect of other laws. The obligations imposed by this section shall

be in addition to and not in derogation of the requirements of any other

law.

6. Applicability. The provisions of subdivisions two and three of this

section shall not apply to membership campground operators as defined in

section six hundred fifty-one of this chapter.