- New York's telemarketing law restricts calling activity during states of emergency.
- In response to the COVID-19 pandemic, Governor Cuomo declared a state of emergency in New York effective March 7, 2020 through September 20, 2020.
- Businesses that violate this law can face enforcement actions and significant accompanying civil penalties.
On March 7, 2020, Governor Cuomo declared a state of emergency in New York in connection with the COVID-19 pandemic. With this announcement, New York's law that bans telemarketing to its residents during states of emergency was triggered. This restriction—which was recently enacted in December 2019—is aimed at keeping "[o]pen lines of communication [that] are crucial to disseminating emergency notifications and information to the public during states of emergency" and is timely in light of this public health crisis. A violation of this law can result in penalties of up to $11,000 per violation and subject businesses to litigation pursuant to New York's consumer protection regime.
This law amended two statutes under New York's General Business Law that make it unlawful for any telemarketer to "knowingly make an unsolicited telemarketing sales call to any person in a county, city, town or village under a declared state of emergency or disaster emergency." N.Y. Gen. Bus. Law § 399-pp(7)(f); N.Y. Gen. Bus. Law § 399-z(5-a). Each of these statutory provisions has different exemptions and enforcement mechanisms. Section 399-pp(7)(f)—the Telemarketing and Consumer Fraud and Abuse Prevention Act—does not define "unsolicited telemarketing sales calls" and applies to telemarketing calls regardless if they are automated or made by a live person. Only a narrow set of calls are exempt from the law: (1) certain debt collection calls; (2) telephone calls in which the sale is not completed and payment is not required until after a face-to-face meeting with the telemarketer; (3) customer-initiated calls to a telemarketer that are not a result of a solicitation; and (4) business calls except ones that involve the retail sale of nondurable office or cleaning supplies. N.Y. Gen. Bus. Law § 399-pp(10)(b). A violation is "deemed a deceptive act and practice," which could allow private litigants to bring suit and recover the greater of $50 or actual damages (and up to $1,000 for willful violations), and can be concurrently enforced by the district attorney who can seek civil penalties ranging from $1,000 to $2,000 per violation. N.Y. Gen. Bus. Law § 399-pp(11). In addition, businesses can violate this section if they contract with the telemarketer and "ha[ve] actual knowledge that the telemarketer is acting in violation of this section. . . . unless such [business] takes reasonable measures to prevent and correct any conduct that violates this section." Id.
Section 399-z, on the other hand, does define "unsolicited telemarketing sales calls" and specifically excludes calls made in response to a customer's express written or verbal request or in connection with an established business relationship, which has not been terminated. N.Y. Gen. Bus. Law § 399-z(1-k). A violation of this provision is enforced by the Secretary of State, who is authorized to assess a fine not to exceed $11,000 for each violation.
Businesses should proceed with caution in making calls to customers and potential customers in New York State while the state of emergency is in place. Businesses can still engage in collection calls for the time being, but even collection calls may soon become restricted as there has been a push for New York to restrict private collections activity (New York has already paused collections of debts owed to the state). On the other hand, businesses should not make unsolicited telemarketing calls to residents of New York that may otherwise be permissible under the Telephone Consumer Protection Act (TCPA). For national telemarketing campaigns, businesses should be scrubbing, or asking their vendors to scrub, lists for phone numbers assigned to New York area codes. Even for business-to-business calls—which are generally exempt from the law—telemarketers should carefully review the content of their calls. If the business calls "involve the retail sale of nondurable office or cleaning supplies," such as hand sanitizer and other nondurable cleaning products that are in high demand during the COVID-19 crisis, they are also prohibited. See N.Y. Gen. Bus. Law § 399-pp(10)(b)(4).
Before engaging in any calling campaigns to areas under a state of emergency, businesses should check to see if telemarketing calls and debt collection activities are subject to additional restrictions. And if so, they should take measures to avoid calling residents in the affected areas.
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