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A00606 Summary:

A00606 Actions:

A00606 Floor Votes:

A00606 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           606
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 9, 2013
                                       ___________
 
        Introduced  by  M.  of  A.  DINOWITZ,  CLARK,  ORTIZ, MILLMAN, ROBINSON,
          RIVERA, GABRYSZAK, 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,  WEISENBERG  --  read  once and referred to the
          Committee on Consumer Affairs and Protection
 
        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    § 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;
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02933-01-3
        A. 606                              2
 
     1    (iv) any attorney-at-law or law firm collecting a debt in such capaci-
     2  ty on behalf of and in the name of a  client  through  legal  activities
     3  such  as the filing and prosecution of lawsuits to reduce debts to judg-

     4  ments, but not any attorney-at-law or law firm who regularly engages  in
     5  activities  traditionally associated with debt collection, including but
     6  not limited to, sending demand letters or  making  collection  telephone
     7  calls;
     8    (v) any person employed by a utility regulated under the provisions of
     9  the public service law, acting for such utility;
    10    (vi)  any  person collecting or attempting to collect any debt owed or
    11  due or asserted to be owed or due another to the extent  such  activity;
    12  (A)  is  incidental  to  a bona fide fiduciary obligation or a bona fide
    13  escrow agreement; (B) concerns a  debt  which  was  originated  by  such
    14  person;  or  (C) concerns a debt which was not in default at the time it

    15  was obtained by such person as a secured party in  a  commercial  credit
    16  transaction involving the creditor;
    17    (vii)  any officer or employee of the United States, any state thereof
    18  or any political subdivision of any state to the extent that  collecting
    19  or  attempting  to collect any debt owed is in the performance of his or
    20  her official duties; or
    21    (viii) any non-profit organization which, at the request of consumers,
    22  performs bona fide consumer credit counseling and assists  customers  in
    23  the liquidation of their debts by receiving payments from such customers
    24  and distributing such amounts to creditors.
    25    2. Each and every debt collection agency shall include in each initial

    26  correspondence  on  a  past due debt to a debtor a clear and conspicuous
    27  written statement, in substantially the following form,  to  be  clearly
    28  and conspicuously labeled "Consumer Rights":
 
    29                               Consumer Rights
 
    30    As  a  consumer  who  owes  or  may owe a consumer debt, you are given
    31  certain protections and rights by New York and federal  laws  regulating
    32  debt  collection  procedures.  You  should  be  aware of your rights and
    33  should not permit your rights to be  violated.    For  more  information
    34  about  your  rights  under  state and federal debt collection procedures
    35  law, contact the New York State  Department  of  Financial  Services  at
    36  (insert  the  current  telephone number established by the Department of

    37  Financial Services for receiving inquiries from  consumers)  or  (insert
    38  the  current address of the website or webpage created pursuant to para-
    39  graph eight of subsection (c) of section three hundred one of the finan-
    40  cial services law).  You may also contact the New  York  State  Attorney
    41  General  at  (insert  the  current  telephone  number established by the
    42  department of law for receiving inquiries from consumers) or (insert the
    43  current address of the website of the department of law).
    44    The notice required by this subdivision shall be printed or written in
    45  at least ten point bold type.
    46    § 2. Subdivision 1 of section 602 of  the  general  business  law,  as
    47  added by chapter 753 of the laws of 1973, is amended to read as follows:

    48    1. Except as otherwise provided by law, any person who [shall violate]
    49  violates the terms of section six hundred one of this article [shall be]
    50  is  guilty  of  a misdemeanor, and each such violation shall be deemed a
    51  separate offense. A violation by any person of section six hundred one-a
    52  of this article, if such violation constitutes the first such offense by
    53  such person, is punishable by a civil penalty not to exceed two  hundred
        A. 606                              3
 
     1  fifty  dollars.  The second offense and any offense committed thereafter
     2  are punishable by a civil penalty not to exceed five hundred dollars.
     3    § 3. Paragraphs 6 and 7 of subsection (c) of section 301 of the finan-

     4  cial  services law, as added by section 1 of part A of chapter 62 of the
     5  laws of 2011, are amended and a new paragraph 8  is  added  to  read  as
     6  follows:
     7    (6)  providing  technical assistance to local governments and not-for-
     8  profits in the development of consumer protection measures with  respect
     9  to financial products and services; [and]
    10    (7)   continuing   and  expanding  the  detection,  investigation  and
    11  prevention of insurance fraud[.]; and
    12    (8) Establishing a website or webpage that includes, but is not limit-
    13  ed to, information regarding  the  protection  and  rights  afforded  to
    14  consumers under state and federal laws regulating debt collection proce-
    15  dures,  a  sample  initial debt collection dispute letter, a sample debt

    16  collection cease and desist letter, and the current contact  information
    17  for  the  attorney general and the federal consumer financial protection
    18  bureau.
    19    § 4. This act shall take effect on the first of January next  succeed-
    20  ing the date on which it shall have become a law.