2023 New York Laws › GBS - General Business › Article 24-A - Fair Trade 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.