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Thursday, December 14, 2023

Governor Hochul Signs Four New Laws to Protect Consumers from Price Gouging, Medical Debt and Unfair Business Practices

Legislation S.608C/A.5653B Prohibits Selling Medicine for an Unconscionably Excessive Price During a Drug Shortage

Legislation S.4907A/A.6275A Prohibits Hospitals, Health Care Professionals and Ambulances from Reporting Medical Debt to Credit Agencies

Legislation S.5941B/A.3245D Requires Companies to Notify Customers of Automatic Subscription Renewals and to Provide Clear Instructions for Canceling

Legislation S.1048A/A.2672B Clarifies that Merchants Must Post the Highest Price a Consumer Might Pay for a Product Regardless of Payment Methods

Governor Hochul on Wednesday, December 13, signed legislation to protect New York consumers from medicine price-gouging and ongoing financial consequences related to medical debt. Additionally, the Governor signed bills what will curb predatory subscription services, and confusion over the price of many goods and services. Legislation S.608-C/A.5653-B prohibits the sale of medicine for an unconscionably excessive price throughout a drug shortage. Legislation S.4907A/A.6275A prohibits hospitals, health care professionals and ambulances from reporting medical debt to credit agencies. Legislation S.5941B/A.3245D requires companies to notify customers of automatic subscription renewals and to provide clear instructions for canceling said services. Legislation S.1048A/A.2672B clarifies that merchants must post the highest price a consumer might pay for a product, regardless of payment methods.

“As costs and inflation continue to creep up, consumer protection is one of the ways that our state is giving New Yorkers more purchasing power and keeping hard-earned money in their pockets,” Governor Hochul said. “This legislation will help to protect individuals struggling with medical debt, unwanted subscriptions, and confusion over prices at the register. No one should have to jump through hoops to protect their finances and today we’re taking steps to help New Yorkers on their journeys toward financial freedom.”

Legislation S.608C/A.5653B prohibits the sale of medicine for an unconscionably excessive price during a drug shortage (as declared by the U.S. Food and Drug Administration). Generally, an “unconscionably excessive price” may include a gross disparity between the price being charged by the seller during the abnormal disruption of the market, and the price charged immediately prior.

Legislation S.4907A/A.6275A prohibits hospitals, health care professionals and ambulances from reporting an individual’s medical debt to credit agencies.

According to a 2023 study from the Urban Institute, 740,000 New Yorkers have medical debt on their credit reports with people of color twice as likely to have medical debt referred to a credit bureau and low-income people three times more likely. By prohibiting hospitals, health care professionals, and certified ambulances from reporting medical debt to credit agencies, this legislation will make it easier for New Yorkers to get jobs, secure credit, rent an apartment, pay for their children’s education and build long-term wealth.

Legislation S.5941B/A.3245D requires businesses to notify consumers of an upcoming automatic renewal or a continuous service charge 45 days prior to the charge. It also requires businesses to include instructions for how to cancel automatic renewals or continuous service charges as part of the notice to the consumer.

Legislation S.1048A/A.2672B requires businesses to clearly post the highest price that a consumer might pay for certain transactions, including any surcharges. The legislation also establishes a civil penalty of up to $500 per violation.

Businesses in New York are permitted to offer two-tiered pricing systems in which the credit card price for certain sales transactions is posted alongside the cash price. By requiring businesses to post the highest price that a consumer might pay, this legislation helps to promote transparency and ensure that consumers are informed about their purchases.


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