BILL NO A00455
SAME AS No same as
SPONSOR Dinowitz (MS)
COSPNSR Millman, Colton, Galef, Jaffee, Cahill, Robinson, Rosenthal, Clark,
MLTSPNSR Boyland, Glick, Magee, Maisel, Perry, Rivera, Scarborough, Sweeney,
Add Art 29-HHH SS604-k - 604-o, Gen Bus L; amd R3015, CPLR
Requires debt collection agencies to be licensed by the state; requires bonding
and allows for penalties.
TITLE OF BILL:
to amend the general business law and the civil practice law and rules,
in relation to debt collection agencies
PURPOSE OR GENERAL IDEA OF BILL:; The purpose of this
bill is to
protect consumers against unfair and deceptive debt collection
practices and maintain a high level of integrity and professionalism
in the debt collection industry, by requiring third party debt
collectors and debt buyers to obtain a license from the Department of
SUMMARY OF SPECIFIC PROVISIONS: This bill would
require third party
debt collection agencies, including those who buy and sell consumer
debt, to obtain a license by October 1, 2013 from the Department of
State (DOS). Licenses would cost $500 and be valid for two years.
In addition to the submission of the usual license application
information, such as business name, address and telephone number,
applicants would be required to submit a summary of the methods used
to confirm the validity of the debts it seeks to collect, the
applicant recordkeeping policy, and whether the applicant intends to
The Secretary of State would be authorized to refuse to issue a
license to any applicant found to have violated New York's Fair Debt
Collection Practices Law (Article 29-H of the General Business Law)
or the federal. Fair Debt Collection Practices Act. The Secretary
would also be authorized to perform investigations and compel the
attendance of witness and a licensed agencies' books and records.
Debt collection agencies would be required to obtain surety bonding.
The amount of the bond would be between $10,000 and $75,000,
depending on the number of people employed by the agency. The bond
would be conditioned on compliance with this article and the payment
of all fines or investigatory costs. Agencies would also be required
to include the license number issued by the DOS on any advertisement,
letterhead, receipt or other printed matter produced by the agency.
The DOS would be required to publish a registry of all licensed debt
collection agencies on its website.
The Attorney General would be authorized to enforce the provisions of
this article by seeking an injunction against a violator. The bill
also provides for a civil penalty of between $100 and $10,000 for
The bill provides for a private right of action for consumers subject
to unlicensed collection activity for actual damages or three
thousand five hundred dollars, whichever is greater, or both. The
court may, in its discretion, increase the award of damages to an
amount not to exceed three times the actual damages up to ten
thousand dollars, if the court finds the defendant willfully violated
Lastly, the bill would amend the Civil Practice Law and Rules to allow
debtors who have been sued by an unlicensed debt collection agency to
move for dismissal of the suit based on the fact that the agency is
not licensed pursuant to this article.
JUSTIFICATION: Federal and state law regulate how
debt collectors may
communicate with debtors and prohibit the use of certain threatening,
deceptive and unfair collection practices. Despite these legal
protections, the number of consumer complaints regarding debt
collection practices continue to rise. Consumer complaints received
by the Federal Trade Commission regarding third party debt collectors
grew for the thirteenth consecutive year in 2010, and consumers filed
with the Commission more complaints against third party collectors
than against any other specific industry. The New York City
Department of Consumer Affairs recently announced that debt
collection complaints topped the Department's annual complaint list
for the first time in the agency's forty-year history in 2008.
While the majority of those engaged in the business of debt collection
are honest and ethical in their dealings, there is a minority of
unscrupulous collection agencies in operation that practice abusive
tactics. Due to the sensitive nature of the information used in the
course of such agency's everyday business, and the vulnerable
position consumers find themselves in when dealing with these
agencies, it is imperative that the State protect the interests,
reputations and fiscal well-being of its citizens against those
agencies that abuse their privilege of operation.
Third party debt collection agencies are currently required to be
licensed in at least twenty-nine states, as well as, the cities of
Buffalo and New York. This bill would provide all New York consumers
with the protections currently afforded to those who reside in
Buffalo and New York City.
PRIOR LEGISLATIVE HISTORY:
2011-12- A.8429-B Advanced to 3rd Reading Cal. 692
2009-2010: A.3926-D - Passed Assembly
2007-2008: A.8153-A - Passed Assembly
EFFECTIVE DATE: This act shall take effect on the one
eightieth day after it shall have become a law; provided, however,
that effective immediately, the addition, amendment and/or repeal of
any rule or regulation necessary for the implementation of this act
on its effective date is authorized and directed to be made and
completed on or before such effective date.
S T A T E O F N E W Y O R K
2013-2014 Regular Sessions
I N A S S E M B L Y
January 9, 2013
Introduced by M. of A. DINOWITZ, MILLMAN, COLTON, GALEF, JAFFEE, CAHILL,
ROBINSON, ROSENTHAL, CLARK, HOOPER -- Multi-Sponsored by -- M. of A.
BOYLAND, GLICK, MAGEE, MAISEL, PERRY, RIVERA, SCARBOROUGH, SWEENEY,
WEISENBERG -- read once and referred to the Committee on Consumer
Affairs and Protection
AN ACT to amend the general business law and the civil practice law and
rules, in relation to debt collection agencies
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Legislative intent. The legislature hereby finds the pres-
2 ence of consumer-related problems with respect to the practices of debt
3 collection agencies. Federal and state laws regulate how debt collectors
4 may communicate with debtors and prohibit the use of certain threaten-
5 ing, deceptive and unfair collection practices. Despite these legal
6 protections, the number of consumer complaints regarding debt collection
7 practices continue to rise. Consumer complaints received by the Federal
8 Trade Commission regarding third-party debt collectors grew for the
9 thirteenth consecutive year in 2010, and consumers filed with the
10 Commission more complaints against third-party collectors than against
11 any other specific industry. While the majority of those engaged in the
12 business of debt collection are honest and ethical in their dealings,
13 there is a minority of unscrupulous collection agencies in operation
14 that practice abusive tactics. Due to the sensitive nature of the infor-
15 mation used in the course of such agency's everyday business, and the
16 vulnerable position consumers find themselves in when dealing with these
17 agencies, it is incumbent upon this legislature to protect the inter-
18 ests, reputations and fiscal well-being of the citizens of this state
19 against those agencies who would abuse their privilege of operation.
20 Therefore, it is herein declared that the state should license debt
21 collection agencies.
22 S 2. The general business law is amended by adding a new article
23 29-HHH to read as follows:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
A. 455 2
1 ARTICLE 29-HHH
2 DEBT COLLECTION AGENCIES
3 SECTION 604-K. DEFINITIONS.
4 604-L. DEBT COLLECTION AGENCIES.
5 604-M. SURETY BONDING REQUIREMENT.
6 604-N. PENALTIES.
7 604-O. APPLICABILITY.
8 S 604-K. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS
9 SHALL HAVE THE FOLLOWING MEANINGS:
10 1. (A) "DEBT COLLECTION AGENCY" SHALL MEAN A PERSON, FIRM OR CORPO-
11 RATION ENGAGED IN BUSINESS, THE PRINCIPAL PURPOSE OF WHICH IS TO REGU-
12 LARLY COLLECT OR ATTEMPT TO COLLECT DEBTS OWED OR DUE OR ASSERTED TO BE
13 OWED OR DUE TO ANOTHER AND SHALL ALSO INCLUDE A BUYER OF DELINQUENT DEBT
14 WHO SEEKS TO COLLECT SUCH DEBT EITHER DIRECTLY OR THROUGH THE SERVICES
15 OF ANOTHER BY, INCLUDING BUT NOT LIMITED TO, INITIATING OR USING LEGAL
16 PROCESSES OR OTHER MEANS TO COLLECT OR ATTEMPT TO COLLECT SUCH DEBT.
17 (B) THE TERM DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDI-
18 TOR WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDI-
20 (II) ANY OFFICER OR EMPLOYEE OF A DEBT COLLECTION AGENCY;
21 (III) ANY PERSON WHILE ACTING AS A DEBT COLLECTION AGENCY FOR ANOTHER
22 PERSON, BOTH OF WHOM ARE RELATED BY COMMON OWNERSHIP OR AFFILIATED BY
23 CORPORATE CONTROL, IF THE PERSON ACTING AS A DEBT COLLECTION AGENCY DOES
24 SO ONLY FOR PERSONS TO WHOM IT IS SO RELATED OR AFFILIATED AND IF THE
25 PRINCIPAL BUSINESS OF SUCH PERSON IS NOT THE COLLECTION OF DEBTS;
26 (IV) ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
27 ANY OTHER PERSON IN CONNECTION WITH THE JUDICIAL ENFORCEMENT OF ANY
29 (V) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACITY
30 ON BEHALF OF AND IN THE NAME OF A CLIENT SOLELY THROUGH ACTIVITIES THAT
31 MAY ONLY BE PERFORMED BY A LICENSED ATTORNEY, BUT NOT ANY
32 ATTORNEY-AT-LAW OR LAW FIRM OR PART THEREOF WHO REGULARLY ENGAGES IN
33 ACTIVITIES TRADITIONALLY PERFORMED BY DEBT COLLECTORS, INCLUDING, BUT
34 NOT LIMITED TO, CONTACTING A DEBTOR THROUGH THE MAIL OR VIA TELEPHONE
35 WITH THE PURPOSE OF COLLECTING A DEBT OR OTHER ACTIVITIES AS DETERMINED
36 BY RULE OF THE SECRETARY;
37 (VI) ANY PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS
38 OF THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
39 (VII) ANY PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT OWED OR
40 DUE OR ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT SUCH ACTIVITY:
41 (A) IS INCIDENTAL TO A BONA FIDE FIDUCIARY OBLIGATION OR A BONA FIDE
42 ESCROW AGREEMENT; (B) CONCERNS A DEBT WHICH WAS ORIGINATED BY SUCH
43 PERSON; OR (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE TIME IT
44 WAS OBTAINED BY SUCH PERSON AS A SECURED PARTY IN A COMMERCIAL CREDIT
45 TRANSACTION INVOLVING THE CREDITOR;
46 (VIII) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE THEREOF
47 OR ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT COLLECTING
48 OR ATTEMPTING TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF HIS OR
49 HER OFFICIAL DUTIES;
50 (IX) ANY NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST OF CONSUMERS,
51 PERFORMS BONA FIDE CONSUMER CREDIT COUNSELING AND ASSISTS CUSTOMERS IN
52 THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
53 AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS; OR
54 (X) ANY PERSON, FIRM OR CORPORATION ENGAGED IN BUSINESS, THE PRINCIPAL
55 PURPOSE OF WHICH IS TO REGULARLY COLLECT OR ATTEMPT TO COLLECT DEBTS
56 OWED OR DUE OR ASSERTED TO BE OWED OR DUE TO ANOTHER PERSON WHERE THE
A. 455 3
1 DEBT IS ENFORCED FOR CHILD SUPPORT, SPOUSAL SUPPORT, MAINTENANCE OR
2 ALIMONY, PROVIDED, HOWEVER, THAT IF SUCH PERSON, FIRM OR CORPORATION
3 ALSO REGULARLY COLLECTS OR ATTEMPTS TO COLLECT DEBTS OTHER THAN THOSE
4 ENFORCED FOR CHILD SUPPORT, SPOUSAL SUPPORT, MAINTENANCE OR ALIMONY,
5 SUCH PERSON MUST COMPLY WITH THE REQUIREMENTS OF THIS ARTICLE.
6 2. "CONSUMER" MEANS ANY NATURAL PERSON OBLIGATED OR ALLEGEDLY OBLI-
7 GATED TO PAY ANY DEBT.
8 3. "DEBT" MEANS ANY OBLIGATION OR ALLEGED OBLIGATION OF A CONSUMER TO
9 PAY MONEY ARISING OUT OF A TRANSACTION IN WHICH THE MONEY, PROPERTY,
10 INSURANCE, OR SERVICES WHICH ARE THE SUBJECT OF THE TRANSACTION ARE
11 PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES, WHETHER OR NOT
12 SUCH OBLIGATION HAS BEEN REDUCED TO JUDGMENT.
13 4. "DEPARTMENT" MEANS THE DEPARTMENT OF STATE.
14 5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
15 6. "SECRETARY" MEANS THE SECRETARY OF STATE.
16 S 604-L. DEBT COLLECTION AGENCIES. 1. ON OR AFTER OCTOBER FIRST, TWO
17 THOUSAND FOURTEEN, NO PERSON SHALL ACT AS A DEBT COLLECTION AGENCY WITH-
18 OUT FIRST HAVING OBTAINED A LICENSE IN ACCORDANCE WITH THE PROVISIONS OF
19 THIS ARTICLE, AND WITHOUT FIRST BEING IN COMPLIANCE WITH ALL OTHER
20 APPLICABLE LAWS, RULES AND REGULATIONS.
21 2. (A) ALL LICENSES ISSUED PURSUANT TO THIS ARTICLE SHALL BE VALID FOR
22 TWO YEARS UNLESS SOONER SUSPENDED OR REVOKED. THE SECRETARY SHALL ESTAB-
23 LISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
24 (B) THE FEE FOR A LICENSE OR RENEWAL THEREOF SHALL BE FIVE HUNDRED
26 3. (A) EACH PERSON APPLYING FOR A DEBT COLLECTION AGENCY LICENSE OR
27 RENEWAL THEREOF SHALL FILE AN APPLICATION IN SUCH FORM AND DETAIL AS THE
28 SECRETARY MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS SECTION.
29 (B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SECRETARY SHALL
30 REQUIRE THE FOLLOWING INFORMATION, AND SHALL, AS APPROPRIATE, REQUIRE
31 SUCH INFORMATION NOT ONLY OF THE APPLICANT BUT ALSO OF ANY OF ITS PRIN-
32 CIPALS, PARTNERS, OFFICERS AND DIRECTORS, OR ANY PERSON OR ENTITY
33 CONTROLLING AN INTEREST GREATER THAN TEN PERCENT:
34 (I) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
35 (II) THE BUSINESS NAME, IF OTHER THAN APPLICANT;
36 (III) THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE STREET
37 AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
38 (IV) THE BUSINESS TELEPHONE OF THE APPLICANT;
39 (V) THE LENGTH OF TIME THAT THE APPLICANT HAS BEEN A DEBT COLLECTION
41 (VI) A STATEMENT INDICATING WHETHER THE APPLICANT HAS:
42 (A) BEEN CONVICTED OF ANY CRIME OR IS A DEBTOR ON ANY UNPAID CIVIL
43 JUDGMENT RELATING TO WORK AS A DEBT COLLECTION AGENCY; AND
44 (B) AT ANY TIME IN THE PAST BEEN ISSUED A LICENSE PURSUANT TO THIS
45 ARTICLE, OR HAS BEEN ISSUED A LICENSE FOR DEBT COLLECTION ACTIVITIES BY
46 ANY OTHER STATE OR LOCAL AUTHORITY, AND IF SO, WHETHER SUCH LICENSE WAS
47 EVER REVOKED OR SUSPENDED;
48 (VII) A DETAILED DESCRIPTION OF THE BUSINESS PRACTICES OR METHODS
49 USED, OR INTENDED TO BE USED, BY THE APPLICANT TO CONFIRM THE VALIDITY
50 OF THE DEBTS IT SEEKS TO COLLECT FROM CONSUMERS;
51 (VIII) A SUMMARY OF THE APPLICANT'S RECORD-KEEPING POLICY, INCLUDING,
52 BUT NOT LIMITED TO:
53 (A) THE LENGTH OF TIME THE APPLICANT MAINTAINS, OR INTENDS TO MAIN-
54 TAIN, RECORDS PERTAINING TO CONSUMERS; AND
55 (B) THE MANNER IN WHICH THE APPLICANT RECORDS AND STORES, OR INTENDS
56 TO RECORD AND STORE: CONSUMER CHALLENGES TO THE VALIDITY OF DEBT; BILL-
A. 455 4
1 ING ERRORS; PAYMENTS MADE BY A CONSUMER; SETTLEMENT AGREEMENTS; INFORMA-
2 TION REGARDING PARTIES RESPONSIBLE FOR DEBT; ANY STATEMENTS MADE BY A
3 CONSUMER ALLEGING THAT THE DEBT AROSE FROM IDENTITY THEFT; AND ANY
4 STATEMENTS MADE BY A CONSUMER STATING THAT THE CONSUMER RECEIVED STATU-
5 TORILY EXEMPT INCOME AS DEFINED IN SECTION FIFTY-TWO HUNDRED TWENTY-TWO
6 OF THE CIVIL PRACTICE LAW AND RULES;
7 (IX) WHETHER THE APPLICANT REGULARLY SELLS, OR INTENDS TO SELL, DEBTS.
8 IF THE APPLICANT SELLS, OR INTENDS TO SELL DEBTS, SUCH APPLICANT SHALL
9 BE REQUIRED TO PROVIDE THE SECRETARY WITH A SUMMARY OF THE APPLICANT'S
10 POLICY WITH RESPECT TO THE INFORMATION REGARDING A CONSUMER'S ACCOUNT
11 THAT IT TRANSMITS, OR WILL TRANSMIT, TO THE PURCHASER OF A DEBT; AND
12 (X) A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET FORTH
13 IN THE APPLICATION IS CURRENT AND ACCURATE.
14 (C) AN APPLICANT WHO IS A NON-RESIDENT OF THE STATE SHALL PROVIDE THE
15 NAME AND ADDRESS OF A REGISTERED AGENT WITHIN THE STATE OR DESIGNATE THE
16 SECRETARY AS HIS OR HER AGENT UPON WHOM PROCESS OR OTHER NOTIFICATION
17 MAY BE SERVED.
18 4. IN DETERMINING WHETHER TO ISSUE OR RENEW A LICENSE, THE SECRETARY
19 SHALL CONSIDER THE CHARACTER, COMPETENCY AND INTEGRITY OF THE APPLICANT.
20 THE SECRETARY MAY REFUSE TO ISSUE OR RENEW A LICENSE TO ANY PERSON, FIRM
21 OR CORPORATION WHOM HE OR SHE FINDS HAS: (A) BEEN CONVICTED OF ANY CRIME
22 DEFINED IN ARTICLE ONE HUNDRED FIFTY-FIVE OF THE PENAL LAW OR ARTICLE
23 TWENTY-TWO-A OF THIS CHAPTER OR FAILED TO PAY ANY FINAL CIVIL JUDGMENT
24 RELATING TO WORK AS A DEBT COLLECTION AGENCY, IF SUCH REFUSAL, IN THE
25 JUDGMENT OF THE SECRETARY, BEST PROMOTES THE INTERESTS OF THE PEOPLE OF
26 THIS STATE; OR
27 (B) VIOLATED ARTICLE TWENTY-NINE-H OF THIS CHAPTER OR THE FEDERAL FAIR
28 DEBT COLLECTION PRACTICES ACT (15 USC S 1692 ET SEQ.).
29 ALL DETERMINATIONS BY THE SECRETARY TO ISSUE OR RENEW A LICENSE SHALL
30 BE MADE IN ACCORDANCE WITH SUBDIVISION SIXTEEN OF SECTION TWO HUNDRED
31 NINETY-SIX OF THE EXECUTIVE LAW AND ARTICLE TWENTY-THREE-A OF THE
32 CORRECTION LAW.
33 5. NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE DEPART-
34 MENT SHALL BE GIVEN TO THE DEPARTMENT AT ITS OFFICES IN ALBANY WITHIN
35 TEN DAYS OF CHANGES OF NAME OR ADDRESS BY LICENSED DEBT COLLECTION AGEN-
36 CIES. THE FEE FOR FILING EACH CHANGE OF NAME OR ADDRESS NOTICE SHALL BE
37 TEN DOLLARS.
38 6. THE FEES ESTABLISHED BY THIS SECTION SHALL NOT BE REFUNDABLE.
39 7. EACH DEBT COLLECTION AGENCY ENGAGED IN COLLECTING DEBTS SHALL
40 COMMUNICATE HIS OR HER LICENSE NUMBER UPON THE REQUEST OF ANY INTERESTED
41 PARTY. ANY ADVERTISEMENT, LETTERHEAD, RECEIPT OR OTHER PRINTED MATTER OF
42 A LICENSEE MUST CONTAIN THE LICENSE NUMBER ASSIGNED TO THE LICENSEE BY
43 THE DEPARTMENT. SUCH LICENSE NUMBER SHALL BE CLEARLY AND CONSPICUOUSLY
45 8. NO PERSON, FIRM OR CORPORATION SHALL: (A) PRESENT, OR ATTEMPT TO
46 PRESENT, AS HIS, HER OR ITS OWN, THE LICENSE NUMBER OF ANOTHER;
47 (B) KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE DEPART-
48 MENT FOR THE PURPOSE OF PROCURING A LICENSE;
49 (C) FALSELY REPRESENT THEMSELVES TO BE A LICENSED DEBT COLLECTION
51 (D) USE OR ATTEMPT TO USE A LICENSE WHICH HAS EXPIRED;
52 (E) OFFER TO PERFORM OR PERFORM ANY COLLECTION OF DEBTS WITHOUT HAVING
53 A CURRENT LICENSE AS IS REQUIRED UNDER THIS ARTICLE; OR
54 (F) REPRESENT IN ANY MANNER THAT HIS, HER OR ITS LICENSE CONSTITUTES
55 AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF THE DEBT
56 COLLECTION AGENCY.
A. 455 5
1 9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
2 BLE OR ASSIGNABLE.
3 10. THE SECRETARY SHALL ISSUE EACH DEBT COLLECTION AGENCY A UNIQUE
4 LICENSE NUMBER.
5 11. THE DEPARTMENT SHALL MAINTAIN AND PUBLISH A REGISTRY OF ALL
6 LICENSED DEBT COLLECTION AGENCIES, WHICH SHALL LIST AND IDENTIFY, ALL
7 LICENSED DEBT COLLECTION AGENCIES DOING BUSINESS IN THIS STATE. THE
8 DEPARTMENT SHALL MAKE THE REGISTRY AVAILABLE ON ITS WEBSITE.
9 12. (A) THE SECRETARY SHALL ADOPT SUCH RULES AND REGULATIONS AS HE OR
10 SHE MAY DETERMINE ARE NECESSARY FOR THE ADMINISTRATION AND ENFORCEMENT
11 OF THIS ARTICLE, AND SHALL PROVIDE WRITTEN NOTIFICATION OF THE
12 PROVISIONS OF THIS ARTICLE TO ALL DEBT COLLECTION AGENCIES LICENSED
13 PURSUANT TO THIS ARTICLE.
14 (B) IN ADDITION TO ANY OTHER POWERS OF THE SECRETARY, NOT IN LIMITA-
15 TION THEREOF, HE OR SHE SHALL HAVE THE POWER TO ENFORCE THE PROVISIONS
16 OF THIS ARTICLE, TO INVESTIGATE ANY VIOLATION THEREOF, TO INVESTIGATE
17 THE BUSINESS, BUSINESS PRACTICES AND BUSINESS METHODS OF ANY DEBT
18 COLLECTION AGENCY, AND TO CONDUCT ROUTINE EXAMINATIONS OF THE FINANCIAL
19 SOLVENCY OF ANY DEBT COLLECTION AGENCY, IF IN THE OPINION OF THE SECRE-
20 TARY, SUCH INVESTIGATION OR EXAMINATION IS WARRANTED. EACH DEBT
21 COLLECTION AGENCY SHALL BE OBLIGED, ON REQUEST OF THE SECRETARY OF
22 STATE, TO SUPPLY SUCH INFORMATION, BOOKS, PAPERS OR RECORDS AS MAY BE
23 REQUIRED CONCERNING HIS, HER OR ITS BUSINESS, BUSINESS PRACTICES OR
24 BUSINESS METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE TO
25 COMPLY WITH A LAWFUL REQUEST OF THE SECRETARY SHALL BE A GROUND FOR
26 DENYING AN APPLICATION FOR A LICENSE, OR FOR REVOKING, SUSPENDING, OR
27 FAILING TO RENEW A LICENSE ISSUED UNDER THIS ARTICLE.
28 (C) THE DEPARTMENT SHALL HAVE THE POWER TO REVOKE OR SUSPEND ANY
29 LICENSE, OR IN LIEU THEREOF TO IMPOSE A FINE NOT LESS THAN ONE HUNDRED
30 DOLLARS NOR MORE THAN TWO THOUSAND DOLLARS PER VIOLATION OR INSTANCE,
31 PAYABLE TO THE DEPARTMENT, OR REPRIMAND ANY LICENSEE OR DENY AN APPLICA-
32 TION FOR A LICENSE OR RENEWAL THEREOF UPON PROOF:
33 (I) THAT THE APPLICANT OR LICENSEE HAS VIOLATED ANY OF THE PROVISIONS
34 OF THIS ARTICLE OR THE RULES AND REGULATIONS PROMULGATED PURSUANT TO
35 THIS ARTICLE;
36 (II) THAT THE APPLICANT OR LICENSEE HAS PRACTICED FRAUD, DECEIT OR
38 (III) THAT THE APPLICANT OR LICENSEE HAS MADE A MATERIAL MISSTATEMENT
39 IN THE APPLICATION FOR OR RENEWAL OF HIS OR HER LICENSE; OR
40 (IV) THAT THE APPLICANT OR LICENSEE HAS DEMONSTRATED INCOMPETENCE OR
41 UNTRUSTWORTHINESS IN HIS OR HER ACTIONS.
42 13. THE DEPARTMENT SHALL BEFORE DENYING AN APPLICATION FOR A LICENSE
43 OR BEFORE REVOKING OR SUSPENDING ANY LICENSE, OR IMPOSING ANY FINE OR
44 REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE HEAR-
45 ING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN WRIT-
46 ING THE APPLICANT, OR THE HOLDER OF SUCH LICENSE, OF ANY CHARGE MADE AND
47 SHALL AFFORD SUCH APPLICANT OR LICENSEE AN OPPORTUNITY TO BE HEARD IN
48 PERSON OR BY COUNSEL IN REFERENCE THERETO. SUCH WRITTEN NOTICE MAY BE
49 SERVED PERSONALLY TO THE APPLICANT OR LICENSEE, OR BY CERTIFIED MAIL TO
50 THE LAST KNOWN BUSINESS ADDRESS OF SUCH APPLICANT OR LICENSEE.
51 14. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
52 DEPARTMENT SHALL PRESCRIBE AND SHALL BE CONDUCTED BY SUCH OFFICER OR
53 PERSON IN THE DEPARTMENT AS THE SECRETARY MAY DESIGNATE, WHO SHALL HAVE
54 THE POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON SO DESIG-
55 NATED, ANY PERSON IN THIS STATE AND ADMINISTER AN OATH TO AND TAKE
56 TESTIMONY OF ANY PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A
A. 455 6
1 SUBPOENA ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL PRAC-
2 TICE LAW AND RULES. SUCH OFFICER OR PERSON IN THE DEPARTMENT DESIGNATED
3 TO TAKE SUCH TESTIMONY SHALL NOT BE BOUND BY COMMON LAW OR STATUTORY
4 RULES OF EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
5 15. IN THE EVENT THAT THE DEPARTMENT SHALL DENY THE APPLICATION FOR,
6 OR REVOKE OR SUSPEND ANY SUCH LICENSE, OR IMPOSE ANY FINE OR REPRIMAND,
7 ITS DETERMINATION SHALL BE IN WRITING AND OFFICIALLY SIGNED. THE
8 ORIGINAL OF SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED IN THE
9 OFFICE OF THE DEPARTMENT AND COPIES THEREOF SHALL BE MAILED TO THE
10 APPLICANT OR LICENSEE AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER SUCH
12 16. THE DEPARTMENT, ACTING BY THE OFFICE OR PERSON DESIGNATED TO
13 CONDUCT THE HEARING PURSUANT TO SUBDIVISION THIRTEEN OF THIS SECTION OR
14 BY SUCH OTHER OFFICER OR PERSON IN THE DEPARTMENT AS THE SECRETARY OF
15 STATE MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF ANY
16 LICENSEE WHO HAS BEEN CONVICTED IN THIS STATE OR ANY OTHER STATE OR
17 TERRITORY OF A FELONY OR OF ANY MISDEMEANOR FOR A PERIOD NOT EXCEEDING
18 THIRTY DAYS PENDING A HEARING AND A DETERMINATION OF CHARGES MADE
19 AGAINST HIM OR HER. IF SUCH HEARING IS ADJOURNED AT THE REQUEST OF THE
20 LICENSEE, OR BY REASON OF ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR
21 HER BEHALF, SUCH SUSPENSION MAY BE CONTINUED FOR THE ADDITIONAL PERIOD
22 OF SUCH ADJOURNMENT.
23 17. THE ACTION OF THE DEPARTMENT IN GRANTING OR REFUSING TO GRANT OR
24 TO RENEW A LICENSE UNDER THIS ARTICLE OR IN REVOKING OR SUSPENDING OR
25 REFUSING TO REVOKE OR SUSPEND SUCH A LICENSE OR IMPOSING ANY FINE OR
26 REPRIMAND SHALL BE SUBJECT TO REVIEW BY A PROCEEDING INSTITUTED UNDER
27 ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES AT THE
28 INSTANCE OF THE APPLICANT FOR SUCH LICENSE, THE HOLDER OF A LICENSE SO
29 REVOKED, SUSPENDED, FINED OR REPRIMANDED.
30 18. FOR THE PURPOSE OF THIS ARTICLE, LICENSEES MAY BE HELD RESPONSIBLE
31 FOR STATEMENTS, REPRESENTATIONS, PROMISES OR ACTS OF THEIR EMPLOYEES OR
32 THEIR AGENTS WITHIN THE SCOPE OF THEIR AUTHORITY; PROVIDED, HOWEVER,
33 THAT LICENSEES SHALL NOT BE HELD RESPONSIBLE FOR STATEMENTS, REPRESENTA-
34 TIONS, PROMISES OR ACTS WHICH ARE CONTRARY TO INSTRUCTIONS OR WHICH
35 CONSTITUTE GROSS NEGLIGENCE OR INTENTIONAL TORTS UNLESS SPECIFICALLY
36 AUTHORIZED BY THE LICENSEE.
37 19. (A) ANY PERSON, FIRM OR CORPORATION THAT OPERATES AS A DEBT
38 COLLECTION AGENCY WITHOUT A LICENSE SHALL BE REQUIRED TO PAY A CIVIL
39 PENALTY TO THE DEPARTMENT OF NOT MORE THAN FIVE HUNDRED DOLLARS PER
40 ATTEMPT TO COLLECT A DEBT IN VIOLATION OF THIS SECTION.
41 (B) IN ADDITION TO ANY OTHER PENALTIES, IF A PERSON IS FOUND TO HAVE
42 COMMITTED REPEATED, MULTIPLE OR PERSISTENT VIOLATIONS OF ANY PROVISION
43 OF THIS ARTICLE, SUCH PERSON MAY BE RESPONSIBLE FOR THE COST OF THE
44 DEPARTMENT'S INVESTIGATION.
45 S 604-M. SURETY BONDING REQUIREMENT. 1. AS A CONDITION OF OBTAINING A
46 LICENSE PURSUANT TO THIS ARTICLE, EVERY DEBT COLLECTION AGENCY APPLICANT
47 WHO IS APPLYING FOR A LICENSE AND EMPLOYS BETWEEN ONE AND FOUR INDIVID-
48 UALS ENGAGED IN THE COLLECTION OF DEBTS SHALL OBTAIN AND CONTINUE IN
49 FULL FORCE AND EFFECT A BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE
50 LETTER OF CREDIT IN THE AMOUNT OF TEN THOUSAND DOLLARS TO BE FILED WITH
51 THE SECRETARY.
52 2. AS A CONDITION TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
53 EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
54 EMPLOYS BETWEEN FIVE AND NINE INDIVIDUALS ENGAGED IN THE COLLECTION OF
55 DEBTS SHALL OBTAIN AND CONTINUE IN FULL FORCE AND EFFECT A BOND,
A. 455 7
1 CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT OF
2 TWENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
3 3. AS A CONDITION TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
4 EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
5 EMPLOYS BETWEEN TEN AND TWENTY INDIVIDUALS ENGAGED IN THE COLLECTION OF
6 DEBTS SHALL OBTAIN AND CONTINUE IN FULL FORCE AND EFFECT A BOND,
7 CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT OF
8 FIFTY THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
9 4. AS A CONDITION TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
10 EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
11 EMPLOYS TWENTY OR MORE INDIVIDUALS ENGAGED IN THE COLLECTION OF DEBTS
12 SHALL OBTAIN AND CONTINUE IN FULL FORCE AND EFFECT A BOND, CONTRACT OF
13 INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT, IN THE AMOUNT OF
14 SEVENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
15 5. SUCH SURETY BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF
16 CREDIT SHALL BE CONDITIONED THAT THE APPLICANT WILL COMPLY WITH THIS
17 ARTICLE, ARTICLE TWENTY-NINE-H, AND ARTICLE TWENTY-NINE-HH OF THIS CHAP-
18 TER AND PAY ALL CIVIL PENALTIES, FINES, OR OTHER OBLIGATIONS IMPOSED BY
19 THE SECRETARY OR A COURT OF LAW, INVESTIGATORY COSTS REQUIRED TO BE
20 PAID, OR ANY FINAL JUDGMENT AGAINST THE LICENSEE PURSUANT TO SUCH ARTI-
22 6. THE TOTAL LIABILITY IMPOSED ON THE SURETY BOND UNDER THIS SECTION
23 FOR ALL BREACHES OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT OF
24 THE BOND. SUCH LIABILITY IS LIMITED TO THE AMOUNT OF THE PENALTY OR
25 INVESTIGATORY COSTS. IN NO EVENT WILL THE SURETY ON A BOND BE LIABLE FOR
26 TOTAL CLAIMS IN EXCESS OF THE BOND AMOUNT, REGARDLESS OF THE NUMBER OR
27 NATURE OF CLAIMS MADE AGAINST THE BOND OR THE NUMBER OF YEARS THE BOND
28 REMAINED IN FORCE.
29 7. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION AND ANY LICENSEE
30 SHALL BE REQUIRED TO PROVIDE THIRTY DAYS NOTICE TO THE SECRETARY PRIOR
31 TO THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAILURE TO MAIN-
32 TAIN SUCH A BOND SHALL OPERATE TO REVOKE THE LICENSE OF THE DEBT
33 COLLECTION AGENCY UPON NOTICE AND HEARING.
34 S 604-N. PENALTIES. 1. WHEREVER THERE SHALL BE A VIOLATION OF THIS
35 ARTICLE, AN APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME
36 OF THE PEOPLE OF THE STATE OF NEW YORK TO A COURT OR JUSTICE HAVING
37 JURISDICTION BY A SPECIAL PROCEEDING TO ISSUE AN INJUNCTION, AND UPON
38 NOTICE TO THE DEFENDANT OF NOT LESS THAN FIVE DAYS, TO ENJOIN OR
39 RESTRAIN THE CONTINUANCE OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO
40 THE SATISFACTION OF THE COURT OR JUSTICE THAT THE DEFENDANT HAS, IN
41 FACT, VIOLATED THIS SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT
42 OR JUSTICE, ENJOINING AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT
43 REQUIRING PROOF THAT ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED
44 THEREBY. IN ANY SUCH PROCEEDING, THE COURT MAY MAKE ALLOWANCES TO THE
45 ATTORNEY GENERAL AS PROVIDED IN PARAGRAPH SIX OF SUBDIVISION (A) OF
46 SECTION EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES,
47 AND DIRECT RESTITUTION. WHENEVER THE COURT SHALL DETERMINE THAT A
48 VIOLATION OF THIS SECTION HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL
49 PENALTY OF NOT LESS THAN ONE HUNDRED DOLLARS NOR MORE THAN TEN THOUSAND
50 DOLLARS FOR EACH VIOLATION. IN CONNECTION WITH ANY SUCH PROPOSED APPLI-
51 CATION, THE ATTORNEY GENERAL IS AUTHORIZED TO TAKE PROOF AND MAKE A
52 DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE
53 WITH THE CIVIL PRACTICE LAW AND RULES.
54 2. ANY PERSON WHO HAS BEEN THE SUBJECT OF AN ATTEMPT TO COLLECT A DEBT
55 BY A DEBT COLLECTION AGENCY THAT IS NOT LICENSED PURSUANT TO THIS ARTI-
56 CLE MAY BRING AN ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAWFUL
A. 455 8
1 ACT OR PRACTICE, AN ACTION TO RECOVER HIS OR HER ACTUAL DAMAGES OR THREE
2 THOUSAND FIVE HUNDRED DOLLARS, WHICHEVER IS GREATER, OR BOTH SUCH
3 ACTIONS. THE COURT MAY, IN ITS DISCRETION, INCREASE THE AWARD OF DAMAGES
4 TO AN AMOUNT NOT TO EXCEED THREE TIMES THE ACTUAL DAMAGES UP TO TEN
5 THOUSAND DOLLARS, IF THE COURT FINDS THE DEFENDANT WILLFULLY VIOLATED
6 THIS ARTICLE. IN THE CASE OF ANY SUCCESSFUL ACTION TO ENFORCE THE FORE-
7 GOING LIABILITY, THE COURT MAY AWARD THE COSTS OF THE ACTION TOGETHER
8 WITH REASONABLE ATTORNEY'S FEES.
9 S 604-O. APPLICABILITY. 1. EXCEPT AS PROVIDED IN SUBDIVISION TWO OF
10 THIS SECTION, THE PROVISIONS OF THIS ARTICLE SHALL EXCLUSIVELY GOVERN
11 THE LICENSING OF DEBT COLLECTION AGENCIES NOTWITHSTANDING THE PROVISIONS
12 OF ANY OTHER LAW TO THE CONTRARY AND FURTHER, NO LOCAL LAW SHALL BE
13 ENACTED WHICH SHALL REQUIRE ANY FEE OR LICENSE FOR THE LICENSURE OR
14 REGISTRATION OF DEBT COLLECTION AGENCIES.
15 2. THE PROVISIONS OF THIS ARTICLE SHALL NOT BE CONSTRUED TO LIMIT IN
16 ANY WAY THE AUTHORITY OF A POLITICAL SUBDIVISION TO ENACT, IMPLEMENT AND
17 CONTINUE TO ENFORCE LOCAL LAWS AND REGULATIONS GOVERNING THE LICENSURE
18 OR REGISTRATION OF DEBT COLLECTION AGENCIES THAT WERE IN EFFECT PRIOR TO
19 THE EFFECTIVE DATE OF THIS ARTICLE, OR TO ENACT, IMPLEMENT AND ENFORCE
20 ANY AMENDMENTS THERETO.
21 S 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
22 as amended by chapter 458 of the laws of 2012, is amended to read as
24 (e) License to do business. Where the plaintiff's cause of action
25 against a consumer arises from the plaintiff's conduct of a business
26 which is required by state or local law to be licensed by the department
27 of consumer affairs of the city of New York, the Suffolk county depart-
28 ment of consumer affairs, the Westchester county department of consumer
29 affairs/weight-measures, the county of Rockland, the county of Putnam
30 [or], the Nassau county department of consumer affairs OR THE DEPARTMENT
31 OF STATE PURSUANT TO ARTICLE TWENTY-NINE-HHH OF THE GENERAL BUSINESS
32 LAW, the complaint shall allege, as part of the cause of action, that
33 plaintiff was duly licensed at the time of services rendered and shall
34 contain the name and number, if any, of such license and the govern-
35 mental agency which issued such license; provided, however, that where
36 the plaintiff does not have a license at the commencement of the action
37 the plaintiff may, subject to the provisions of rule [thirty hundred]
38 THREE THOUSAND twenty-five of this article, amend the complaint with the
39 name and number of an after-acquired license or the previously held
40 license, as the case may be, and the name of the governmental agency
41 which issued such license or move for leave to amend the complaint in
42 accordance with such provisions. The failure of the plaintiff to comply
43 with this subdivision will permit the defendant to move for dismissal
44 pursuant to paragraph seven of subdivision (a) of rule thirty-two
45 hundred eleven of this chapter.
46 S 4. This act shall take effect on the one hundred eightieth day after
47 it shall have become a law; provided, however, that effective immediate-
48 ly, the addition, amendment and/or repeal of any rule or regulation
49 necessary for the implementation of this act on its effective date is
50 authorized and directed to be made and completed on or before such
51 effective date.