§ 5-31 Future Services Contracts.
RCNY § 5-31
(a)Definition. A contract for consumer services that will be provided on a continuing basis is a "contract for future consumer services." However, this section does not apply to: (1) boarding accommodations; (2) travel arrangements made less than a year in advance; (3) the sale of goods which include warranties of service and repair; (4) services by non-profit educational institutions.
(b)Liability for cancellation. A consumer who cancels a contract for future services cannot be charged more than the full contract price. However, up to the amount of the full contract price, the consumer may be charged the total of the following amounts: (1) 5 percent of the cash price, or $50, whichever is less; (2) the cost to the seller for any goods the consumer used or the consumer is keeping; (3) the portion of the full contract price representing services received by the consumer (if a consumer cancels a contract for lessons by missing consecutive lessons that represent at least 25 percent of the lessons in the entire course, those missed lessons up to 25 percent can be treated as services received by the consumer).
(c)Prompt refunds. If a buyer has paid a seller more money than this section allows a seller to keep, the seller must refund the extra payment, or make a refund available, within ten days of cancellation.
(d)Cancellation. Cancellation occurs when: (1) the consumer mails the seller notice of intent to cancel; or (2) the seller actually knows the consumer intends to cancel; or (3) the consumer misses consecutive lessons that represent at least 25 percent of an entire course, and the consumer does not inform the seller in writing that he or she intends to remain enrolled.
(e)Notice. The seller's contract form must conspicuously disclose the seller's refund policy, and must contain the following notice in a prominent place: IF YOU CANCEL THIS CONTRACT (THE SELLER) MAY KEEP ONLY 5% OF THE CASH PRICE UP TO A MAXIMUM OF $50, PLUS A PORTION OF THE CONTRACT PRICE BASED UPON THE LESSONS OR SERVICES YOU HAVE USED. YOU MAY NOTIFY (THE SELLER) OF YOUR INTENT TO CANCEL BY MAIL, ADDRESSED TO (THE SELLER) AT (SELLER'S ADDRESS).
