Bill Text: NY A08383 | 2011-2012 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Requires debt collectors to send consumers a written notice of their rights under state law along with their initial debt collection correspondence; applies to consumer rather than commercial debts.

Spectrum: Partisan Bill (Democrat 30-0)

Status: (Introduced - Dead) 2012-06-12 - reported referred to ways and means [A08383 Detail]

Download: New_York-2011-A08383-Amended.html

---

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        8383--A
                              2011-2012 Regular Sessions
                                 I N  A S S E M B L Y
                                     June 15, 2011
                                      ___________
       Introduced  by  M.  of  A.  DINOWITZ,  CLARK,  ORTIZ, MILLMAN, ROBINSON,
         J. RIVERA, GABRYSZAK, N. RIVERA, JAFFEE -- Multi-Sponsored by -- M. of
         A. AUBRY, BRENNAN,  COOK,  CYMBROWITZ,  ENGLEBRIGHT,  FARRELL,  GLICK,
         GOTTFRIED, HOOPER, JACOBS, LIFTON, LUPARDO, MAGEE, MAGNARELLI, PAULIN,
         PERRY,  PRETLOW,  SCARBOROUGH,  WEINSTEIN, WEISENBERG -- read once and
         referred to the Committee on Consumer Affairs and Protection -- recom-
         mitted to the Committee on Consumer Affairs and Protection in  accord-
         ance  with  Assembly  Rule  3,  sec.  2  -- committee discharged, bill
         amended, ordered reprinted as amended and recommitted to said  commit-
         tee
       AN ACT to amend the general business law and the financial services law,
         in relation to debt collection notices
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1.   The general business law  is  amended  by  adding  a  new
    2  section 601-a to read as follows:
    3    S  601-A.  DEBT  COLLECTION  NOTICE TO CONSUMERS.   1. AS USED IN THIS
    4  SECTION, THE FOLLOWING TERM SHALL HAVE THE FOLLOWING MEANING:
    5    "DEBT COLLECTION AGENCY" SHALL MEAN  A  PERSON,  FIRM  OR  CORPORATION
    6  ENGAGED  IN  BUSINESS,  THE  PRINCIPAL  PURPOSE OF WHICH IS TO REGULARLY
    7  COLLECT OR ATTEMPT TO COLLECT DEBTS: (I) OWED  OR DUE OR ASSERTED TO  BE
    8  OWED  OR  DUE  TO  ANOTHER;  OR  (II)  OBTAINED BY, OR ASSIGNED TO, SUCH
    9  PERSON, FIRM OR CORPORATION,  THAT  ARE  IN  DEFAULT  WHEN  OBTAINED  OR
   10  ACQUIRED BY SUCH PERSON, FIRM OR CORPORATION.
   11    THE  TERM  DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDITOR
   12  WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDITOR;
   13    (II) ANY  PERSON WHILE ACTING AS  A DEBT COLLECTION AGENCY FOR ANOTHER
   14  PERSON, BOTH OF WHOM ARE RELATED BY COMMON OWNERSHIP  OR  AFFILIATED  BY
   15  CORPORATE CONTROL, IF THE PERSON ACTING AS A DEBT COLLECTION AGENCY DOES
   16  SO  ONLY  FOR  PERSONS TO WHOM IT IS SO RELATED OR AFFILIATED AND IF THE
   17  PRINCIPAL BUSINESS OF SUCH PERSON IS NOT THE COLLECTION OF DEBTS;
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD13111-03-1
       A. 8383--A                          2
    1    (III) ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
    2  ANY OTHER PERSON IN CONNECTION WITH  THE  JUDICIAL  ENFORCEMENT  OF  ANY
    3  DEBT;
    4    (IV) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACI-
    5  TY  ON  BEHALF  OF  AND IN THE NAME OF A CLIENT THROUGH LEGAL ACTIVITIES
    6  SUCH AS THE FILING AND PROSECUTION OF LAWSUITS TO REDUCE DEBTS TO  JUDG-
    7  MENTS,  BUT NOT ANY ATTORNEY-AT-LAW OR LAW FIRM WHO REGULARLY ENGAGES IN
    8  ACTIVITIES TRADITIONALLY ASSOCIATED WITH DEBT COLLECTION, INCLUDING  BUT
    9  NOT  LIMITED  TO,  SENDING DEMAND LETTERS OR MAKING COLLECTION TELEPHONE
   10  CALLS;
   11    (V) ANY PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS OF
   12  THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
   13    (VI) ANY PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT  OWED  OR
   14  DUE  OR  ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT SUCH ACTIVITY;
   15  (A) IS INCIDENTAL TO A BONA FIDE FIDUCIARY OBLIGATION  OR  A  BONA  FIDE
   16  ESCROW  AGREEMENT;  (B)  CONCERNS  A  DEBT  WHICH WAS ORIGINATED BY SUCH
   17  PERSON; OR (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE  TIME  IT
   18  WAS  OBTAINED  BY  SUCH PERSON AS A SECURED PARTY IN A COMMERCIAL CREDIT
   19  TRANSACTION INVOLVING THE CREDITOR;
   20    (VII) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE  THEREOF
   21  OR  ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT COLLECTING
   22  OR ATTEMPTING TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF  HIS  OR
   23  HER OFFICIAL DUTIES; OR
   24    (VIII) ANY NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST OF CONSUMERS,
   25  PERFORMS  BONA  FIDE CONSUMER CREDIT COUNSELING AND ASSISTS CUSTOMERS IN
   26  THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
   27  AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS.
   28    2. EACH AND EVERY DEBT COLLECTION AGENCY SHALL INCLUDE IN EACH INITIAL
   29  CORRESPONDENCE ON A PAST DUE DEBT TO A DEBTOR A  CLEAR  AND  CONSPICUOUS
   30  WRITTEN  STATEMENT OF AT LEAST THE FOLLOWING ITEMS, IN SUBSTANTIALLY THE
   31  FOLLOWING FORM, TO BE CLEARLY AND CONSPICUOUSLY LABELED  "DEBTOR'S  BILL
   32  OF RIGHTS":
   33                           DEBTOR'S BILL OF RIGHTS
   34    AS  A  DEBTOR WHO OWES OR MAY OWE A CONSUMER CLAIM, YOU ARE GIVEN SOME
   35  PROTECTION AND RIGHTS BY THE NEW YORK AND FEDERAL LAWS  REGULATING  DEBT
   36  COLLECTION  PROCEDURES.    YOU  SHOULD  BE  AWARE OF YOUR RIGHTS AND NOT
   37  PERMIT YOUR RIGHTS TO BE VIOLATED.  SOME, NOT ALL, OF THE MORE IMPORTANT
   38  PROTECTIONS ARE HIGHLIGHTED BELOW.
   39    1. A DEBT COLLECTOR MAY CONTACT YOU OR ANY MEMBER OF  YOUR  FAMILY  OR
   40  HOUSEHOLD DIRECTLY. HOWEVER, THEY MAY NOT CONTACT YOU WITH SUCH FREQUEN-
   41  CY,  AT  UNUSUAL  HOURS, OR IN A MANNER THAT CAN BE EXPECTED TO ABUSE OR
   42  HARASS YOU. THEY ALSO CANNOT THREATEN ACTION WHICH THEY DO NOT  TAKE  IN
   43  THE USUAL COURSE OF BUSINESS.
   44    2.  A DEBT COLLECTOR MAY NOT THREATEN TO CONTACT YOUR EMPLOYER REGARD-
   45  ING A DEBT PRIOR TO OBTAINING A FINAL JUDGMENT AGAINST YOU.  HOWEVER,  A
   46  DEBT  COLLECTOR  MAY  CONTACT YOUR EMPLOYER TO EXECUTE A WAGE ASSIGNMENT
   47  AGREEMENT IF YOU, THE DEBTOR, HAVE AGREED TO THE ASSIGNMENT.
   48    3. A DEBT COLLECTOR CANNOT USE A COMMUNICATION  WHICH  APPEARS  TO  BE
   49  AUTHORIZED,  ISSUED, OR APPROVED BY A GOVERNMENT AGENCY OR ATTORNEY WHEN
   50  IT IS NOT.
   51    4. A DEBT COLLECTOR CANNOT DISCLOSE OR THREATEN TO  DISCLOSE  INFORMA-
   52  TION  AFFECTING  YOUR  REPUTATION  FOR CREDITWORTHINESS IF THE COLLECTOR
   53  KNOWS OR HAS REASON TO KNOW THE INFORMATION IS FALSE. A  DEBT  COLLECTOR
   54  ALSO  CANNOT ATTEMPT OR THREATEN TO ENFORCE A RIGHT WHEN IT KNOWS OR HAS
   55  REASON TO KNOW THE RIGHT DOES NOT EXIST.
       A. 8383--A                          3
    1    FOR MORE INFORMATION ABOUT YOUR RIGHTS UNDER STATE  AND  FEDERAL  DEBT
    2  COLLECTION  PROCEDURES  LAW,  CONTACT  THE  NEW YORK STATE DEPARTMENT OF
    3  FINANCIAL SERVICES AT (INSERT THE CURRENT TELEPHONE  NUMBER  ESTABLISHED
    4  BY  THE  DEPARTMENT  OF  FINANCIAL SERVICES FOR RECEIVING INQUIRIES FROM
    5  CONSUMERS)  OR  (INSERT  THE  CURRENT  ADDRESS OF THE WEBSITE OR WEBPAGE
    6  CREATED PURSUANT TO PARAGRAPH EIGHT OF SUBDIVISION (C) OF SECTION  THREE
    7  HUNDRED  ONE  OF  THE FINANCIAL SERVICES LAW).  YOU MAY ALSO CONTACT THE
    8  NEW YORK STATE ATTORNEY GENERAL AT (INSERT THE CURRENT TELEPHONE  NUMBER
    9  ESTABLISHED  BY  THE  DEPARTMENT  OF  LAW  FOR  RECEIVING INQUIRIES FROM
   10  CONSUMERS) OR (INSERT THE CURRENT ADDRESS OF THE WEBSITE OF THE  DEPART-
   11  MENT OF LAW).
   12    THE NOTICE REQUIRED BY THIS SUBDIVISION SHALL BE PRINTED OR WRITTEN IN
   13  AT LEAST TEN POINT BOLD TYPE.
   14    S  2.  Subdivision  1  of  section 602 of the general business law, as
   15  added by chapter 753 of the laws of 1973, is amended to read as follows:
   16    1. Except as otherwise provided by law, any person who [shall violate]
   17  VIOLATES the terms OF SECTION SIX HUNDRED ONE of this article [shall be]
   18  IS guilty of a misdemeanor, and each such violation shall  be  deemed  a
   19  separate offense. A VIOLATION BY ANY PERSON OF SECTION SIX HUNDRED ONE-A
   20  OF THIS ARTICLE, IF SUCH VIOLATION CONSTITUTES THE FIRST SUCH OFFENSE BY
   21  SUCH  PERSON, IS PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED TWO HUNDRED
   22  FIFTY DOLLARS.  THE SECOND OFFENSE AND ANY OFFENSE COMMITTED  THEREAFTER
   23  ARE PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED FIVE HUNDRED DOLLARS.
   24    S 3. Paragraphs 6 and 7 of subsection (c) of section 301 of the finan-
   25  cial  services law, as added by section 1 of part A of chapter 62 of the
   26  laws of 2011, are amended and a new paragraph 8  is  added  to  read  as
   27  follows:
   28    (6)  providing  technical assistance to local governments and not-for-
   29  profits in the development of consumer protection measures with  respect
   30  to financial products and services; [and]
   31    (7)   continuing   and  expanding  the  detection,  investigation  and
   32  prevention of insurance fraud[.]; AND
   33    (8) ESTABLISHING A WEBSITE OR WEBPAGE THAT INCLUDES, BUT IS NOT LIMIT-
   34  ED TO, INFORMATION REGARDING  THE  PROTECTION  AND  RIGHTS  AFFORDED  TO
   35  CONSUMERS UNDER STATE AND FEDERAL LAWS REGULATING DEBT COLLECTION PROCE-
   36  DURES,  A  SAMPLE  INITIAL DEBT COLLECTION DISPUTE LETTER, A SAMPLE DEBT
   37  COLLECTION CEASE AND DESIST LETTER, AND THE CURRENT CONTACT  INFORMATION
   38  FOR THE ATTORNEY GENERAL AND THE FEDERAL TRADE COMMISSION.
   39    S  4. This act shall take effect on the first of January next succeed-
   40  ing the date on which it shall have become a law.