N.Y. General Business Law § 394-c: Limitations on certain contracts involving social referral services

§ 394-c. Limitations on certain contracts involving social referral

services. 1. As used in this section, the following terms shall have the

following meanings:

(a) "social referral service" shall include any service for a fee

providing matching of members, by use of computer or any other means,

for the purpose of dating or general social contact.

(b) "ancillary services" shall refer to goods or services directly or

indirectly related to or to be provided in connection with the social

referral service process, including but not limited to photography,

grooming, cosmetology, dating etiquette, dating counseling, or other

services.

(c) "online dating service" shall mean any social referral service

where the services are offered primarily online, such as by means of an

internet website or a mobile application.

(d) "banned member" shall mean the member whose account or profile is

the subject of a fraud ban.

(e) "fraud ban" shall mean when a member's account or profile is

barred from an online dating service because, in the judgment of the

service, the member was found to use or is substantially likely to be

using a false identity, or poses a significant risk of attempting to

obtain money from other members through fraudulent means.

(f) "New York member" shall mean a person who provides a New York

residential or billing address or zip code or is in New York when

registering with the online dating service.

(g) "personally identifying information" shall mean any representation

of information that permits the identity of an individual to whom the

information applies to be reasonably inferred by either direct or

indirect means which shall include, but shall not be limited to, a

person's full name, home address, telephone number, geographic location,

email address, social security number, or a combination of

non-personally identifying information which, when put together, can

permit the identification of the person. The first name, last name, and

image of an individual, where voluntarily provided to an online dating

service with the knowledge that it will be communicated to individuals

on the service's platform other than the individual providing it, shall

not be considered personally identifying information when disclosed in

connection with a fraud ban.

2. No contract for social referral service shall require payment by

the purchaser of such service of a cash price in excess of one thousand

dollars. Services to be rendered to the purchaser under the contract may

extend over a period not to exceed two years from the date the contract

is entered into. This subdivision shall not apply to an online dating

service contract where the initial term is one year or less and any

subsequent terms are one year or less where payment in excess of the

amount provided under this subdivision is reasonable in light of the

service's offerings.

2-a. No social referral service provider shall require the purchase of

an ancillary service by a purchaser of a social referral service as a

condition of entering into a social referral service contract with such

provider.

3. Every contract for social referral service which requires payment

by the purchaser of such service of a total amount in excess of

twenty-five dollars shall provide that the seller of such service must

furnish to the purchaser a specified certain number of social referrals

per month. This subdivision shall not apply to an online dating service

where the user can use a search functionality or is presented with

possible matches.

4. Every contract for social referral service which requires payment

by the purchaser of such service of a total amount in excess of

twenty-five dollars shall provide that in the event that the seller of

such service does not furnish to the purchaser the specified certain

number of social referrals, or in case of an online dating service with

search functionality or algorithm or location based matching, any social

referral, for two or more successive months the purchaser shall have the

option to cancel the contract and to receive a refund of all monies paid

pursuant to the cancelled contract with the exception that the seller

shall be entitled to retain as a cancellation fee fifteen per cent of

the cash price or a pro rata amount for the number of referrals

furnished to the purchaser, whichever is greater. Every such contract

shall set forth in the contract and in the bill of rights the manner in

which such services provider determines its cancellation fee pursuant to

this subdivision.

5. Every contract for social referral service shall provide that the

seller will not without the prior written consent of the purchaser sell,

assign or otherwise transfer for business or for any other purpose to

any person any information and material of a personal or private nature

acquired from a purchaser directly or indirectly including but not

limited to answers to tests and questionnaires, photographs or

background information.

5-a. Every contract for a social referral service shall provide each

purchaser with the unilateral right to place such purchaser's membership

on hold for a period of up to one year; provided, however, that the

purchaser and social referral service may mutually agree to a longer

period not to exceed two years. To exercise the unilateral right

provided in this subdivision, a purchaser must notify the social

referral service provider in writing of such purchaser's intent to do

so.

6. Every contract for social referral service shall provide that at

the expiration of the contract or at the expiration of services rendered

by the seller, for any reason, all information and material of a

personal or private nature acquired from a purchaser directly or

indirectly including but not limited to answers to tests and

questionnaires, photographs or background information shall be promptly

returned by the seller to the purchaser by certified mail or destroyed

and deleted from any electronic storage devices, with certification of

destruction or deletion promptly provided to the purchaser, unless the

retention of such information and material is required (a) by federal,

state, or local laws, rules or regulations or (b) to comply with a

judicial court order.

7. (a) Every contract for social referral service shall provide that

such contract may be cancelled without a cancellation fee within three

business days after the date of physical or electronic receipt by the

buyer of a copy of the written contract.

(b) In every social referral service sale, the seller shall furnish to

the buyer a fully completed copy of the 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 the immediate proximity to the space

reserved in the contract for the signature of the buyer and in not less

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

following form:

YOU, THE BUYER, MAY CANCEL THIS CONTRACT WITHOUT ANY CANCELLATION FEE

WITHIN THREE (3) BUSINESS DAYS AFTER THE DATE OF THIS CONTRACT. SEE THE

ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT.

(c) Notice of cancellation shall be delivered by certified or

registered United States mail at the address, or electronically at the

email address, specified in the contract.

(d) At the time the buyer signs the social referral service contract,

a completed form in duplicate, captioned "NOTICE OF CANCELLATION", which

shall be attached to the contract 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 CONTRACT, WITHOUT ANY PENALTY OR OBLIGATION, WITHIN

THREE (3) BUSINESS DAYS AFTER THE DATE OF THIS CONTRACT BY MAILING THIS

SIGNED AND DATED NOTICE OF CANCELLATION BY CERTIFIED OR REGISTERED

UNITED STATES MAIL OR EMAIL TO THE SELLER AT THE ADDRESS OR EMAIL

ADDRESS SPECIFIED HEREIN. IF YOU CANCEL, ANY PAYMENTS MADE BY YOU UNDER

THE CONTRACT WILL BE RETURNED WITHIN TEN (10) BUSINESS DAYS FOLLOWING

RECEIPT BY THE SELLER OF YOUR CANCELLATION NOTICE. TO CANCEL THIS

TRANSACTION, MAIL BY CERTIFIED OR REGISTERED UNITED STATES MAIL OR EMAIL

A SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE TO:

(Name of Seller) NOT LATER THAN _______________

(Address or email address of Seller) (Date)

___________________

In case of an online dating service, the contract, including the

statement required by this subdivision, may be furnished and signed

electronically, provided such contract is provided to the buyer in a

clear and conspicuous manner.

(e) In every social referral service sale or renewal, the seller shall

provide each purchaser with a clear and conspicuous, separate written

notice, which may be a conspicuous and appropriately labeled hyperlink

for an online dating service, to be known as the "Dating Service

Consumer Bill of Rights", which shall contain at least the following

information:

Dating Service Consumer Bill of Rights

1. No social referral service contract shall require the payment by

you, the purchaser, of an amount greater than one thousand dollars. In

addition, no such contract may extend over a period of time greater than

two years.

2. No social referral service contract shall require you, the

purchaser, to purchase a good or service which is directly or indirectly

related to the social referral service. These extra services are known

as ancillary services and, while these ancillary service may be offered

to you, the law prohibits the seller from requiring that you purchase

this service as a condition of your social referral service contract.

3. If your social referral service contract costs more than

twenty-five dollars, the seller must furnish a minimum number of

referrals per month to you, unless your social referral service provides

the user with a search functionality or is presented with possible

matches. If this minimum amount is not furnished to you for two

successive months, or in the case of an online dating service with

search funtionality or algorithm or location based matching, any social

referral, you have the option of cancelling the contract and receiving a

full refund of all the money you paid, less a cancellation fee which

cannot exceed either fifteen percent of the cash price or a pro rata

amount for the number of referrals furnished to you.

4. Unless your social referral service contract is for online dating

services that are generally available to users on a regional, national

or global basis, your social referral service contract must specify the

distance which you, the purchaser, are willing to travel to meet any

social referral. No social referrals shall be furnished where you and

the referral live at a distance greater than the distance specified in

the contract.

5. The provider must have an established policy to address the

situation of your moving outside the area it services. This policy must

be explained in your contract.

6. If any provision of the social referral service contract is

violated, you have the right to bring a court action against the

provider which has violated the contract.

8. Every contract for social referral service shall specify the

distance which the buyer is willing to travel to meet any social

referral. No social referral shall be furnished by the seller to the

buyer if either the buyer or the social referral reside at a distance

further than the distance specified in either the buyer's or social

referral's contracts. This subdivision shall not apply to online dating

services that are generally available to users on a regional, national,

or global basis.

8-a. Every social referral service provider must establish and

administer a fair and reasonable policy for the situation in which a

purchaser moves to permanently reside at a location outside the service

area of such provider. This policy must be set forth in every contract

for social referral service.

9. (a) Whenever there shall be a violation of this section an

application may be made by the attorney general in the name of the

people of the state of New York to a court or justice having

jurisdiction by a special proceeding to issue an injunction, and upon

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

restrain the continuance of such violation; and if it shall appear to

the satisfaction of the court or justice that the defendant has, in

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

justice, enjoining and restraining any further violations, 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 that a

violation of this section has occurred, the court may impose a civil

penalty of not more than one thousand dollars for each violation. In

connection with any such proposed application the attorney general is

authorized to take proof and make a determination of the relevant facts

and to issue subpoenas in accordance with the civil practice law and

rules, and direct restitution.

(b) Any person who has been injured by reason of a violation of this

section may bring an action in such person's own name to enjoin such

violation, an action to recover such person's actual damages or fifty

dollars whichever is greater, or both such actions.

(c) In cities having a population over one million, the provisions of

this section may be enforced concurrently with the attorney general by

the director of a local or municipal consumer affairs office. In cities

having a population over one million, such local entities may also

require social referral services to be licensed. Such licensing

requirements may be promulgated as are reasonably necessary to

effectuate licensure, provided, however, that such localities may not

impose substantive requirements that are inconsistent with or more

restrictive than those set forth in this section. Any fee for such

license may not exceed three hundred forty dollars for a two year

period.

10. (a) An online dating service shall disclose to all of its New York

members known to have previously received and responded to an on-site

message from a banned member:

(1) the user name, identification number, or other profile identifier

of the banned member;

(2) the fact that the banned member was banned because, in the

judgment of the online dating service, the banned member may have been

using a false identity or may pose a significant risk of attempting to

obtain money from other members through fraudulent means;

(3) that a member should never send money or personal financial

information to another member; and

(4) a hyperlink to online information that clearly and conspicuously

addresses the subject of how to avoid being defrauded by another member

of an online dating service.

(b) The notification required by paragraph (a) of this subdivision

shall be:

(1) clear and conspicuous;

(2) by e-mail, text message, or other appropriate means of

communication; and

(3) sent within twenty-four hours after the fraud ban, or at a later

time if the service has determined, based on an analysis of effective

messaging, that a different time is more effective, but in no event

later than three days after the fraud ban.

(c) An online dating service shall not be liable to any member who has

an account or profile that is the subject of a fraud ban, for disclosing

to any member that it has banned the member, the user name or account

identifier of the banned member, or the reasons for the online dating

service's decision to ban such member in accordance with this

subdivision where such disclosure does not contain their personally

identifying information.

(d) This section does not diminish or adversely affect the protections

for online dating services that are afforded in 47 USC 230, or any

rights or protections otherwise provided to a consumer in law.