Leawood, KS – February 21, 2022: The State of New York has introduced a bill which requires money transmitters to provide consumer warnings. New York Senate Bill 166 (NY SB166) was first introduced on January 6, 2021, passed by the Senate on February 15, 2022. NY SB166 is currently under review by the Assembly Banks Committee and will be effective one hundred eighty days after becoming law.
Pursuant to NY SB166, a money transmitter must “clearly and prominently warn the person requesting the transmission prior to completing such transmission of funds.” While not an exhaustive list, NY SB166 lists several examples of acceptable warnings, such as: (a) a title in bold, capital letters saying “Warning: do not fall victim to consumer fraud.”; (b) questions or information that alert a consumer about the dangers of sending funds for lottery winnings, credit card guarantees or loans, internet or phone offers, to persons unknown to the consumer or persons whose identity the consumer cannot verify and any other fraud alert; (c) information about how to ask questions of the sales clerk or representative; and (d) information about how to stop a transfer.
Under NY SB166, “clearly and prominently” means: (a) in written communications, the warning shall appear on the same form as the form used to authorize the transmission of funds, or if no written form is used, via a sign in a location reasonably designed to provide such notice, shall be in a type 8 size sufficiently noticeable for an ordinary consumer to read and comprehend the written warning and shall be in a type that contrasts with the background against which the written warning appears; and (b) in oral communications, the warning shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend. Should any communication be presented solely through oral, written or visual means, NY SB166 requires the warning to be made through the same means.
NY SB166 does not apply to (i) an electronic funds transfer in which funds are not transferred directly to another person and are not available for immediate use; or (ii) an electronic funds transfer made with a gift certificate as defined in N.Y. Gen. Bus. Law § 396-i.
To read New York Assembly Bill 166 click here: New York Assembly Bill 166.
About the Compliance Libraries:
The Compliance Libraries provide a one stop location for comprehensive information on the laws, rules and standards regulating gift cards. Its range includes federal and state laws, GAAP accounting standards and tax rules along with other helpful items.
For more information visit www.compliancelibraries.com.
The Compliance Libraries are a service of Card Issuance & Management, Inc., a subsidiary of Card Compliant, LLC.