Bill Text: NY S02829 | 2019-2020 | General Assembly | Amended

Bill Title: Requires debt collectors to send consumers a written notice of their rights under state law along with their initial debt collection correspondence; such notice would contain information such as who and when a principal creditor may contact a debtor about the debt owed as well as the fact that a principal creditor cannot disclose information affecting a consumer debtor's reputation for creditworthiness if the principal creditor knows or has reason to know such information is false; applies to consumer rather than commercial debts.

Spectrum: Partisan Bill (Democrat 18-0)

Status: (Engrossed) 2020-01-08 - REFERRED TO CONSUMER PROTECTION [S02829 Detail]

Download: New_York-2019-S02829-Amended.html

                STATE OF NEW YORK

            Cal. No. 547

                               2019-2020 Regular Sessions

                    IN SENATE

                                    January 29, 2019

          PERSAUD,  RAMOS,  SALAZAR, SERRANO, STAVISKY -- read twice and ordered
          printed, and when printed to be committed to the Committee on Consumer
          Protection -- reported favorably from said committee, ordered to first
          and second report, ordered to a third  reading,  amended  and  ordered
          reprinted,  retaining its place in the order of third reading -- again
          amended and ordered reprinted, retaining its place  in  the  order  of
          third reading

        AN  ACT  to  amend  the  general  business law and the executive 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-b to read as follows:
     3    § 601-b. Debt collection notice to consumers.  1. (a) As used in  this
     4  section,  "debt  collection  agency" shall mean a person, firm or corpo-
     5  ration engaged in business, the principal purpose of which is  to  regu-
     6  larly  collect or attempt to collect consumer debts: (i) owed  or due or
     7  asserted to be owed or due to another; or (ii) obtained by, or  assigned
     8  to,  such person, firm or corporation, that are in default when obtained
     9  or acquired by such person, firm or corporation.
    10    (b) Debt collection agencies shall not include: (i) any person subject
    11  to (A) serving, filing, or conveying formal legal  pleadings,  discovery
    12  requests,  judgments or other documents pursuant to the applicable rules
    13  of procedure; (B) communicating in, or at the direction of, a  court  of
    14  law  or in depositions or settlement conferences or other communications
    15  in connection with a pending legal action to collect a debt on behalf of
    16  a client; or (C) collecting on or enforcing a money judgment;
    17    (ii) any attorney-at-law or law firm collecting a debt in such capaci-
    18  ty on behalf of and in the name of a  client  through  legal  activities

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 2829--B                          2

     1  such  as  prosecution  of lawsuits to reduce debts to judgments, but not
     2  any attorney-at-law or law firm which regularly  engages  in  activities
     3  traditionally associated with debt collection, including but not limited
     4  to, sending demand letters or making collection telephone calls;
     5    (iii)  any officer or employee of the United States, any state thereof
     6  or any political subdivision of any state to the extent that  collecting
     7  or  attempting  to collect any debt owed is in the performance of his or
     8  her official duties; or
     9    (iv) any non-profit organization which, at the request  of  consumers,
    10  performs  bona  fide consumer credit counseling and assists customers in
    11  the liquidation of their debts by receiving payments from such customers
    12  and distributing such amounts to creditors.
    13    2. Each and every debt collection agency shall include in its  initial
    14  correspondence  on  a past due debt to a consumer, or on a separate form
    15  included with such initial correspondence, the following written  state-
    16  ment  labeled  "Consumer Rights", in a clear and conspicuous manner, and
    17  in a form identical or substantially similar to the following:
    18                             "Consumer's Rights
    19    As a consumer who owes or may owe  a  consumer  debt,  you  are  given
    20  protection  and  rights by the New York and federal laws regulating debt
    21  collection procedures.  You should be aware of your rights.
    22    1. A debt collector cannot contact you with such frequency, at unusual
    23  hours, or in a manner that can be expected to abuse  or  harass  you.  A
    24  debt collector cannot use false or misleading statements when attempting
    25  to collect a debt, such as collecting more than amount owed, or threaten
    26  to  garnish  your  wages  or  levy your bank account without first being
    27  awarded a judgment by a court. A debt collector cannot contact you after
    28  you have requested in writing that they cease communications, except  to
    29  acknowledge receipt of your letter.
    30    2. A debt collector cannot threaten to contact your employer regarding
    31  a  debt  prior  to  obtaining  a  final judgment against you unless such
    32  contact is directly related to wage garnishments.
    33    3. A debt collector cannot use a communication  which  appears  to  be
    34  authorized,  issued, or approved by a government agency or attorney when
    35  it is not.
    36    4. A debt collector cannot disclose or threaten to  disclose  informa-
    37  tion  affecting  your  reputation  for creditworthiness if the collector
    38  knows or has reason to know the information is false. A  debt  collector
    39  also  cannot attempt or threaten to enforce a right when it knows or has
    40  reason to know the right does not exist.
    41    For more information about your rights under state  and  federal  debt
    42  collection  procedures  law, contact the Consumer Protection Division of
    43  the New York State Department of State at (insert the current  telephone
    44  number  or internet website established by the consumer protection divi-
    45  sion for receiving inquiries from consumers).  You may also contact  the
    46  New  York State Attorney General at (insert the current telephone number
    47  established by the  department  of  law  for  receiving  inquiries  from
    48  consumers)  or (insert the current address of the website of the depart-
    49  ment of law), or the New York State Department of Financial Services  at
    50  (insert  the current telephone number or internet website established by
    51  the Department of Financial Services).
    52    If you live in New York  City,  you  may  be  entitled  to  additional
    53  protections under the laws and rules of the city of New York. For infor-
    54  mation  about  your  rights  under  city  law, contact the New York City
    55  department of consumer affairs at 311 or"

        S. 2829--B                          3

     1    The notice required by this subdivision shall be printed or written in
     2  at least ten point bold type.
     3    §  2.  Subdivision  1  of  section 602 of the general business law, as
     4  added by chapter 753 of the laws of 1973, is amended to read as follows:
     5    1. Except as otherwise provided by law, any person who [shall violate]
     6  violates the terms of section six hundred one of this article [shall be]
     7  is guilty of a misdemeanor, and each such violation shall  be  deemed  a
     8  separate offense. A violation by any person of section six hundred one-b
     9  of this article, if such violation constitutes the first such offense by
    10  such  person, is punishable by a civil penalty not to exceed two hundred
    11  fifty dollars.  The second offense and any offense committed  thereafter
    12  are punishable by a civil penalty not to exceed five hundred dollars.
    13    §  3.  Subparagraphs  14  and  15 of paragraph (a) of subdivision 3 of
    14  section 94-a of the executive law, as added by section 21 of part  A  of
    15  chapter 62 of the laws of 2011, are amended to read as follows:
    16    (14)  cooperate  with  and assist consumers in class actions in proper
    17  cases; [and]
    18    (15) create an internet website or webpage pursuant to  section  three
    19  hundred ninety-c of the general business law; and
    20    (16)  create an internet website or webpage that includes the "Consum-
    21  er's Rights" form established pursuant to subdivision two of section six
    22  hundred one-b of the general business law. Such website or webpage shall
    23  also include, but not limited  to,  a  sample  initial  debt  collection
    24  dispute  letter,  a  sample debt collection cease and desist letter, and
    25  the current contact information for the attorney general and the federal
    26  trade commission.
    27    § 4. This act shall take effect on the first of January next  succeed-
    28  ing the date on which it shall have become a law.