Add S601-a, amd S602, Gen Bus L; amd S301, Fin Serv L
Requires debt collectors to send consumers a written notice of their rights under state law along with their initial debt collection correspondence; applies to consumer rather than commercial debts.
STATE OF NEW YORK
________________________________________________________________________
8383--B
2011-2012 Regular Sessions
IN ASSEMBLY
June 15, 2011
___________
Introduced by M. of A. DINOWITZ, CLARK, ORTIZ, MILLMAN, ROBINSON,
J. RIVERA, GABRYSZAK, N. RIVERA, 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, WEINSTEIN, WEISENBERG -- read once and
referred to the Committee on Consumer Affairs and Protection -- recom-
mitted to the Committee on Consumer Affairs and Protection in accord-
ance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- reported and referred to the Committee on Codes -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13111-04-2
A. 8383--B 2
1 so only for persons to whom it is so related or affiliated and if the
2 principal business of such person is not the collection of debts;
3 (iii) any person while serving or attempting to serve legal process on
4 any other person in connection with the judicial enforcement of any
5 debt;
6 (iv) any attorney-at-law or law firm collecting a debt in such capaci-
7 ty on behalf of and in the name of a client through legal activities
8 such as the filing and prosecution of lawsuits to reduce debts to judg-
9 ments, but not any attorney-at-law or law firm who regularly engages in
10 activities traditionally associated with debt collection, including but
11 not limited to, sending demand letters or making collection telephone
12 calls;
13 (v) any person employed by a utility regulated under the provisions of
14 the public service law, acting for such utility;
15 (vi) any person collecting or attempting to collect any debt owed or
16 due or asserted to be owed or due another to the extent such activity;
17 (A) is incidental to a bona fide fiduciary obligation or a bona fide
18 escrow agreement; (B) concerns a debt which was originated by such
19 person; or (C) concerns a debt which was not in default at the time it
20 was obtained by such person as a secured party in a commercial credit
21 transaction involving the creditor;
22 (vii) any officer or employee of the United States, any state thereof
23 or any political subdivision of any state to the extent that collecting
24 or attempting to collect any debt owed is in the performance of his or
25 her official duties; or
26 (viii) any non-profit organization which, at the request of consumers,
27 performs bona fide consumer credit counseling and assists customers in
28 the liquidation of their debts by receiving payments from such customers
29 and distributing such amounts to creditors.
30 2. Each and every debt collection agency shall include in each initial
31 correspondence on a past due debt to a debtor a clear and conspicuous
32 written statement, in substantially the following form, to be clearly
33 and conspicuously labeled "Consumer Rights":
34 Consumer Rights
35 As a consumer who owes or may owe a consumer debt, you are given
36 certain protections and rights by New York and federal laws regulating
37 debt collection procedures. You should be aware of your rights and
38 should not permit your rights to be violated. For more information
39 about your rights under state and federal debt collection procedures
40 law, contact the New York State Department of Financial Services at
41 (insert the current telephone number established by the Department of
42 Financial Services for receiving inquiries from consumers) or (insert
43 the current address of the website or webpage created pursuant to para-
44 graph eight of subdivision (c) of section three hundred one of the
45 financial services law). You may also contact the New York State Attor-
46 ney General at (insert the current telephone number established by the
47 department of law for receiving inquiries from consumers) or (insert the
48 current address of the website of the department of law).
49 The notice required by this subdivision shall be printed or written in
50 at least ten point bold type.
51 § 2. Subdivision 1 of section 602 of the general business law, as
52 added by chapter 753 of the laws of 1973, is amended to read as follows:
53 1. Except as otherwise provided by law, any person who [shall violate]
54 violates the terms of section six hundred one of this article [shall be]
A. 8383--B 3
1 is guilty of a misdemeanor, and each such violation shall be deemed a
2 separate offense. A violation by any person of section six hundred one-a
3 of this article, if such violation constitutes the first such offense by
4 such person, is punishable by a civil penalty not to exceed two hundred
5 fifty dollars. The second offense and any offense committed thereafter
6 are punishable by a civil penalty not to exceed five hundred dollars.
7 § 3. Paragraphs 6 and 7 of subsection (c) of section 301 of the finan-
8 cial services law, as added by section 1 of part A of chapter 62 of the
9 laws of 2011, are amended and a new paragraph 8 is added to read as
10 follows:
11 (6) providing technical assistance to local governments and not-for-
12 profits in the development of consumer protection measures with respect
13 to financial products and services; [and]
14 (7) continuing and expanding the detection, investigation and
15 prevention of insurance fraud[.]; and
16 (8) Establishing a website or webpage that includes, but is not limit-
17 ed to, information regarding the protection and rights afforded to
18 consumers under state and federal laws regulating debt collection proce-
19 dures, a sample initial debt collection dispute letter, a sample debt
20 collection cease and desist letter, and the current contact information
21 for the attorney general and the federal consumer financial protection
22 bureau.
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.
