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

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

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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 - Dead) 2020-01-08 - REFERRED TO CONSUMER PROTECTION [S02829 Detail]

Download: New_York-2019-S02829-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         2829--A
            Cal. No. 547

                               2019-2020 Regular Sessions

                    IN SENATE

                                    January 29, 2019
                                       ___________

        Introduced  by  Sens. THOMAS, ADDABBO, BIAGGI, BROOKS, COMRIE, GAUGHRAN,
          GOUNARDES,  KENNEDY,  KRUEGER,  LIU,  MARTINEZ,  MONTGOMERY,   PARKER,
          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

        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
    19  such  as  prosecution  of lawsuits to reduce debts to judgments, but not
    20  any attorney-at-law or law firm which regularly  engages  in  activities

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01314-07-9
        S. 2829--A                          2

     1  traditionally associated with debt collection, including but not limited
     2  to, sending demand letters or making collection telephone calls;
     3    (iii)  any officer or employee of the United States, any state thereof
     4  or any political subdivision of any state to the extent that  collecting
     5  or  attempting  to collect any debt owed is in the performance of his or
     6  her official duties; or
     7    (iv) any non-profit organization which, at the request  of  consumers,
     8  performs  bona  fide consumer credit counseling and assists customers in
     9  the liquidation of their debts by receiving payments from such customers
    10  and distributing such amounts to creditors.
    11    2. Each and every debt collection agency shall include in its  initial
    12  correspondence  on  a  past due debt to a consumer the following written
    13  statement labeled "Consumer Rights", in a clear and conspicuous  manner,
    14  and in a form identical or substantially similar to the following:
    15                             "Consumer's Rights
    16    As  a  consumer  who  owes  or  may owe a consumer debt, you are given
    17  protection and rights by the New York and federal laws  regulating  debt
    18  collection procedures.  You should be aware of your rights.
    19    1. A debt collector cannot contact you with such frequency, at unusual
    20  hours,  or  in  a  manner that can be expected to abuse or harass you. A
    21  debt collector cannot use false or misleading statements when attempting
    22  to collect a debt, such as collecting more than amount owed, or threaten
    23  to garnish your wages or levy your  bank  account  without  first  being
    24  awarded a judgment by a court. A debt collector cannot contact you after
    25  you  have requested in writing that they cease communications, except to
    26  acknowledge receipt of your letter.
    27    2. A debt collector cannot threaten to contact your employer regarding
    28  a debt prior to obtaining a  final  judgment  against  you  unless  such
    29  contact is directly related to wage garnishments.
    30    3.  A  debt  collector  cannot use a communication which appears to be
    31  authorized, issued, or approved by a government agency or attorney  when
    32  it is not.
    33    4.  A  debt collector cannot disclose or threaten to disclose informa-
    34  tion affecting your reputation for  creditworthiness  if  the  collector
    35  knows  or  has reason to know the information is false. A debt collector
    36  also cannot attempt or threaten to enforce a right when it knows or  has
    37  reason to know the right does not exist.
    38    For  more  information  about your rights under state and federal debt
    39  collection procedures law, contact the Consumer Protection  Division  of
    40  the  New York State Department of State at (insert the current telephone
    41  number or internet website established by the consumer protection  divi-
    42  sion  for receiving inquiries from consumers).  You may also contact the
    43  New York State Attorney General at (insert the current telephone  number
    44  established  by  the  department  of  law  for  receiving inquiries from
    45  consumers) or (insert the current address of the website of the  depart-
    46  ment  of law), or the New York State Department of Financial Services at
    47  (insert the current telephone number or internet website established  by
    48  the Department of Financial Services).
    49    If  you  live  in  New  York  City,  you may be entitled to additional
    50  protections under the laws and rules of the city of New York. For infor-
    51  mation about your rights under city  law,  contact  the  New  York  City
    52  department of consumer affairs at 311 or www.NYC.gov/dca."
    53    The notice required by this subdivision shall be printed or written in
    54  at least twelve point bold type.
    55    §  2.  Subdivision  1  of  section 602 of the general business law, as
    56  added by chapter 753 of the laws of 1973, is amended to read as follows:
        S. 2829--A                          3

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