New York Governor Andrew Cuomo has signed into law an amendment
to Article 26 of New York's General Business Law which will
limit the ability of out-of-state telemarketers to target New
Yorkers at home. The new law prohibits out-of-state
telemarketers from using prerecorded messages without the
recipient's express written consent and requires telemarketers
to provide consumers with the option of placing their phone numbers
on a do-not-call registry. With this new legislation, the
Department of State will have the authority to revoke, suspend, or
ban out-of-state telemarketing companies that violate New
York's telemarketing laws from doing business in the state and
to assess fines of up to $11,000 per violation. In-state and
out-of-state telemarketers are also now required to maintain
records of their telemarketing activities for two years.
Previously, telemarketers licensed outside of New York were able
to target New York consumers, pay a negligible fine for any
complaints, and continue to do business in the state. Now,
out-of-state telemarketers will be bound by the same rules
applicable to in-state telemarketers, including the requirement to
register with New York's Secretary of State. Presently,
fewer than 30 telemarketers are registered in New York, a
relatively low number compared to neighboring states that require
out-of-state telemarketers to register: Pennsylvania has 200,
Vermont has over 300, and New Jersey has more than 500 out-of-state
The law also adds requirements for prerecorded messages under
New York's Do-Not-Call law, enacted in 2000. It requires
that recipients of prerecorded messages in New York affirmatively
and explicitly consent to such calls. Specifically,
telemarketers must obtain the consumer's signature and
telephone number on an agreement that indicates the consumer's
willingness to receive telemarketing calls from or made on behalf
of a specific seller. The agreement must disclose that the
purpose of the agreement is to authorize the telemarketer to make
such calls, and the telemarketer cannot require the consumer to
sign the agreement as a condition of purchase.
Additionally, for telemarketing sales calls delivering
prerecorded messages that could be answered by a consumer, the
telemarketer must allow the consumer to automatically add his or
her phone number to the telemarketer's do-not-call list by
pressing a key or through an automated interactive voice
system. Should the consumer opt out in this manner, the
telemarketer must immediately disconnect the call. In the
case of voicemail or an answering machine, telemarketers must
include in the prerecorded message a toll-free number the consumer
can call to reach an automated service that will add the
consumer's telephone number to the telemarketer's
The bill brings New York's telemarketing laws in line with
the federal Telephone Consumer Protection Act ("TCPA"),
which was strengthened earlier this year. The TCPA prohibits
telemarketers using artificial or prerecorded voices from
delivering telephone messages without the prior express consent of
the called party. The TCPA requires, that at the beginning of
all artificial or prerecorded telephone messages, the caller must
state clearly the identity of the business, individual, or other
entity initiating the call, as well as the telephone number or
address of such business, other entity, or individual.
Earlier this year, the Federal Communications Commission passed an
order requiring that written consent from a consumer be signed and
sufficient to show that the consumer (1) was provided "clear
and conspicuous disclosure" that the consumer will receive
future telemarketing calls through prerecorded messages from or on
behalf of a specific entity, and (2) unambiguously agrees to
receive such calls. Written consent, as in New York's
law, cannot be a condition of purchase.
Both the TCPA and the New York law provide a safe harbor for
businesses that can show they have established and implemented,
with due care, routine business practices to effectively prevent
unlawful telephone solicitations.
The new law takes effect on November 12, 2012. It can be
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As we have previously discussed, if you want your electronic contracts to be enforceable, it is a best practice to require the counterparty to affirmatively accept the contract by checking a box or clicking a button.
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