Suffolk County, NY Article VIII Display of Layaway Program Fees

[Adopted 3-13-2012 by L.L. No. 19-2012]

§ 704-56 Legislative intent.

A. This Legislature hereby finds and determines that the national economy continues to struggle, with average Americans working hard to make ends meet. This Legislature also finds and determines that in response to the lagging economy, several retailers have brought back layaway programs, where customers can purchase an item by paying in installments. This Legislature further finds and determines that many layaway programs now charge a number of fees on layaway purchases. This Legislature finds that these fees can add extraordinary costs to layaway purchases. This Legislature determines that some layaway programs charge the equivalent of an 81% annual percentage interest rate ("APR") on a credit purchase; if these layaway purchases were categorized as credit transactions, they would be found in violation of the state's usury law, which prohibits loan interest rates above 16%.

B. This Legislature further finds that consumers should be made aware of all fees prior to agreeing to a layaway purchase. This Legislature also determines that consumers have a right to clear information about any and all terms and conditions when making a purchase from retail stores.

C. Therefore, the purpose of this article is to require retail stores operating in Suffolk County with layaway programs to prominently post the fees associated with their programs, as well as a calculation of the equivalent APR a customer would pay for a $70 purchase, a $100 purchase, and a $200 purchase based on the layaway fees charged.

§ 704-57 Definitions.

As used in this article, the following terms shall have the meanings indicated:

APR

The annual percentage rating used by credit companies to calculate interest on a purchase.

LAYAWAY PROGRAM

Any program offered by a retail store which allows customers to purchase an item by paying in installments over a fixed period of time and picking up the item upon remitting a final payment.

RETAIL STORE

Any store, including stores whose primary sales product is merchandise of a general nature, selling merchandise at retail. A store which is not open to the general public but is reserved for use by its members shall come within the provisions of this definition unless the members must pay a direct fee to the store to qualify for membership and the store is not required to collect sales tax on transactions with members.

§ 704-58 Requirements.

Any retail store offering a layaway program in the County of Suffolk shall post a conspicuous sign, containing all capital letters no less than one inch in height on a contrasting background posted at the points of sale for layaway purchases, stating "NOTICE OF LAYAWAY PROGRAM FEES, AS REQUIRED UNDER SUFFOLK COUNTY LAW" and shall include the following information regarding the retail store's layaway program, in the same font, size and color on a contrasting background:

A. The layaway service fee;

B. The downpayment requirement for a layaway purchase;

C. The cancellation fee for a layaway purchase;

D. Any additional fees associated with a layaway purchase or cancellation; and

E. The APR which would be charged by a credit company to receive the same cash value of the fees levied on a layaway purchase of $70, $100, and $200.

§ 704-59 Penalties for offenses.

A. Any retail store which intentionally violates any provision of this article shall be subject to a civil penalty of up to $250 for each violation. Each day a violation continues shall constitute a separate offense.

B. Any civil penalty may only be assessed by the Department of Consumer Affairs following a hearing and opportunity for an alleged violator to be heard.

§ 704-60 Enforcement.

This article shall be enforced by the Department of Consumer Affairs.

§ 704-61 Rules and regulations.

The Commissioner of the Department of Consumer Affairs is hereby authorized and empowered to issue and promulgate such rules and regulations as he or she may deem necessary for the implementation and enforcement of this article.

§ 704-62 Applicability.

This article shall apply to all retail stores which offer year-round, seasonal or limited-time layaway programs which are in effect on or after the effective date of this article.

§ 704-63 Reverse preemption.

This article shall be null and void on the same day that statewide or federal legislation goes into effect, incorporating either the same or substantially similar provisions as are contained in this article, or in the event that a pertinent state or federal administrative agency issues and promulgates regulations preempting such action by the County of Suffolk. The County Legislature may determine, via mere resolution, whether or not identical or substantially similar statewide or federal legislation has been enacted for the purposes of triggering the provisions of this section.