Bill Text: NY S00073 | 2011-2012 | General Assembly | Introduced


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 1-0)

Status: (Introduced - Dead) 2012-03-12 - COMMITTEE DISCHARGED AND COMMITTED TO RULES [S00073 Detail]

Download: New_York-2011-S00073-Introduced.html
                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          73
                              2011-2012 Regular Sessions
                                   I N  S E N A T E
                                      (PREFILED)
                                    January 5, 2011
                                      ___________
       Introduced  by  Sen. PERALTA -- read twice and ordered printed, and when
         printed to be committed to the Committee on Consumer Protection
       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-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;
   18    (III) ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
   19  ANY OTHER PERSON IN CONNECTION WITH  THE  JUDICIAL  ENFORCEMENT  OF  ANY
   20  DEBT;
   21    (IV) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACI-
   22  TY  ON  BEHALF  OF  AND IN THE NAME OF A CLIENT THROUGH LEGAL ACTIVITIES
   23  SUCH AS THE FILING AND PROSECUTION OF LAWSUITS TO REDUCE DEBTS TO  JUDG-
   24  MENTS,  BUT NOT ANY ATTORNEY-AT-LAW OR LAW FIRM WHO REGULARLY ENGAGES IN
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD00797-01-1
       S. 73                               2
    1  ACTIVITIES TRADITIONALLY ASSOCIATED WITH DEBT COLLECTION, INCLUDING  BUT
    2  NOT  LIMITED  TO,  SENDING DEMAND LETTERS OR MAKING COLLECTION TELEPHONE
    3  CALLS;
    4    (V) ANY PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS OF
    5  THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
    6    (VI)  ANY  PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT OWED OR
    7  DUE OR ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT  SUCH  ACTIVITY;
    8  (A)  IS  INCIDENTAL  TO  A BONA FIDE FIDUCIARY OBLIGATION OR A BONA FIDE
    9  ESCROW AGREEMENT; (B) CONCERNS A  DEBT  WHICH  WAS  ORIGINATED  BY  SUCH
   10  PERSON;  OR  (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE TIME IT
   11  WAS OBTAINED BY SUCH PERSON AS A SECURED PARTY IN  A  COMMERCIAL  CREDIT
   12  TRANSACTION INVOLVING THE CREDITOR;
   13    (VII)  ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE THEREOF
   14  OR ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT  COLLECTING
   15  OR  ATTEMPTING  TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF HIS OR
   16  HER OFFICIAL DUTIES; OR
   17    (VIII) ANY NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST OF CONSUMERS,
   18  PERFORMS BONA FIDE CONSUMER CREDIT COUNSELING AND ASSISTS  CUSTOMERS  IN
   19  THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
   20  AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS.
   21    2. EACH AND EVERY DEBT COLLECTION AGENCY SHALL INCLUDE IN EACH INITIAL
   22  CORRESPONDENCE  ON  A  PAST DUE DEBT TO A DEBTOR A CLEAR AND CONSPICUOUS
   23  WRITTEN STATEMENT OF AT LEAST THE FOLLOWING ITEMS, IN SUBSTANTIALLY  THE
   24  FOLLOWING  FORM,  TO BE CLEARLY AND CONSPICUOUSLY LABELED "DEBTOR'S BILL
   25  OF RIGHTS":
   26                           DEBTOR'S BILL OF RIGHTS
   27    AS A DEBTOR WHO OWES OR MAY OWE A CONSUMER CLAIM, YOU ARE  GIVEN  SOME
   28  PROTECTION  AND  RIGHTS BY THE NEW YORK AND FEDERAL LAWS REGULATING DEBT
   29  COLLECTION PROCEDURES.   YOU SHOULD BE AWARE  OF  YOUR  RIGHTS  AND  NOT
   30  PERMIT YOUR RIGHTS TO BE VIOLATED.  SOME, NOT ALL, OF THE MORE IMPORTANT
   31  PROTECTIONS ARE HIGHLIGHTED BELOW.
   32    1.  A  DEBT  COLLECTOR MAY CONTACT YOU OR ANY MEMBER OF YOUR FAMILY OR
   33  HOUSEHOLD DIRECTLY. HOWEVER, THEY MAY NOT CONTACT YOU WITH SUCH FREQUEN-
   34  CY, AT UNUSUAL HOURS, OR IN A MANNER THAT CAN BE EXPECTED  TO  ABUSE  OR
   35  HARASS  YOU.  THEY ALSO CANNOT THREATEN ACTION WHICH THEY DO NOT TAKE IN
   36  THE USUAL COURSE OF BUSINESS.
   37    2. A DEBT COLLECTOR MAY NOT THREATEN TO CONTACT YOUR EMPLOYER  REGARD-
   38  ING  A DEBT PRIOR TO OBTAINING A FINAL JUDGMENT AGAINST YOU.  HOWEVER, A
   39  DEBT COLLECTOR MAY CONTACT YOUR EMPLOYER TO EXECUTE  A  WAGE  ASSIGNMENT
   40  AGREEMENT IF YOU, THE DEBTOR, HAVE AGREED TO THE ASSIGNMENT.
   41    3.  A  DEBT  COLLECTOR  CANNOT USE A COMMUNICATION WHICH APPEARS TO BE
   42  AUTHORIZED, ISSUED, OR APPROVED BY A GOVERNMENT AGENCY OR ATTORNEY  WHEN
   43  IT IS NOT.
   44    4.  A  DEBT COLLECTOR CANNOT DISCLOSE OR THREATEN TO DISCLOSE INFORMA-
   45  TION AFFECTING YOUR REPUTATION FOR  CREDITWORTHINESS  IF  THE  COLLECTOR
   46  KNOWS  OR  HAS REASON TO KNOW THE INFORMATION IS FALSE. A DEBT COLLECTOR
   47  ALSO CANNOT ATTEMPT OR THREATEN TO ENFORCE A RIGHT WHEN IT KNOWS OR  HAS
   48  REASON TO KNOW THE RIGHT DOES NOT EXIST.
   49    FOR  MORE  INFORMATION  ABOUT YOUR RIGHTS UNDER STATE AND FEDERAL DEBT
   50  COLLECTION  PROCEDURES  LAW,  CONTACT  THE  NEW  YORK   STATE   CONSUMER
   51  PROTECTION  BOARD AT (INSERT THE CURRENT TELEPHONE NUMBER ESTABLISHED BY
   52  THE STATE CONSUMER PROTECTION BOARD FOR RECEIVING INQUIRIES FROM CONSUM-
   53  ERS) OR (INSERT THE CURRENT ADDRESS OF THE WEBSITE  OR  WEBPAGE  CREATED
   54  PURSUANT  TO  PARAGRAPH  L  OF SUBDIVISION THREE OF SECTION FIVE HUNDRED
   55  FIFTY-THREE OF THE EXECUTIVE LAW).  YOU MAY ALSO CONTACT  THE  NEW  YORK
   56  STATE  ATTORNEY  GENERAL  AT (INSERT THE CURRENT TELEPHONE NUMBER ESTAB-
       S. 73                               3
    1  LISHED BY THE DEPARTMENT OF LAW FOR RECEIVING INQUIRIES FROM  CONSUMERS)
    2  OR (INSERT THE CURRENT ADDRESS OF THE WEBSITE OF THE DEPARTMENT OF LAW).
    3    THE NOTICE REQUIRED BY THIS SUBDIVISION SHALL BE PRINTED OR WRITTEN IN
    4  AT LEAST TEN POINT BOLD TYPE.
    5    S  2.  Subdivision  1  of  section 602 of the general business law, as
    6  added by chapter 753 of the laws of 1973, is amended to read as follows:
    7    1. Except as otherwise provided by law, any person who [shall violate]
    8  VIOLATES the terms OF SECTION SIX HUNDRED ONE of this article [shall be]
    9  IS guilty of a misdemeanor, and each such violation shall  be  deemed  a
   10  separate offense. A VIOLATION BY ANY PERSON OF SECTION SIX HUNDRED ONE-A
   11  OF THIS ARTICLE, IF SUCH VIOLATION CONSTITUTES THE FIRST SUCH OFFENSE BY
   12  SUCH  PERSON, IS PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED TWO HUNDRED
   13  FIFTY DOLLARS.  THE SECOND OFFENSE AND ANY OFFENSE COMMITTED  THEREAFTER
   14  ARE PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED FIVE HUNDRED DOLLARS.
   15    S  3.  Subdivision 3 of section 553 of the executive law is amended by
   16  adding a new paragraph l to read as follows:
   17    L. ESTABLISH A WEBSITE OR WEBPAGE THAT INCLUDES, BUT  IS  NOT  LIMITED
   18  TO,  INFORMATION REGARDING THE PROTECTION AND RIGHTS AFFORDED TO CONSUM-
   19  ERS UNDER STATE AND FEDERAL LAWS REGULATING DEBT COLLECTION  PROCEDURES,
   20  A   SAMPLE  INITIAL  DEBT  COLLECTION  DISPUTE  LETTER,  A  SAMPLE  DEBT
   21  COLLECTION CEASE AND DESIST LETTER, AND THE CURRENT CONTACT  INFORMATION
   22  FOR THE ATTORNEY GENERAL AND THE FEDERAL TRADE COMMISSION.
   23    S  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.
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