S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3926--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 29, 2009
                               ___________

Introduced  by  M.  of  A.  PHEFFER, MILLMAN, FIELDS, COLTON, P. RIVERA,
  GALEF, JAFFEE, GIANARIS, CAHILL, KOON,  ROBINSON,  ROSENTHAL,  STIRPE,
  CLARK,  ESPAILLAT,  HOOPER  -- Multi-Sponsored by -- M. of A. BOYLAND,
  DelMONTE, GLICK, HOYT, LANCMAN,  MAGEE,  MAISEL,  MAYERSOHN,  McENENY,
  PERRY, REILLY, J. RIVERA, SCARBOROUGH, SWEENEY, TOWNS, WALKER, WEISEN-
  BERG  --  read  once and referred to the Committee on Consumer Affairs
  and  Protection  --  committee  discharged,  bill   amended,   ordered
  reprinted as amended and recommitted to said committee

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:

  Section  1. Legislative intent. The legislature hereby finds the pres-
ence of consumer-related problems with respect to the practices of  debt
collection agencies. Federal and state laws regulate how debt collectors
may  communicate  with debtors and prohibit the use of certain threaten-
ing, 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
tenth  consecutive year in 2007, and consumers filed with the Commission
more complaints against third-party collectors than  against  any  other
specific  industry.  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 posi-
tion consumers find themselves in when dealing with these  agencies,  it
is incumbent upon this legislature to protect the interests, reputations
and  fiscal well-being of the citizens of this state against those agen-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06743-04-9

              

A. 3926--A                          2

cies who would abuse their privilege  of  operation.  Therefore,  it  is
herein declared that the state should license debt collection agencies.
  S  2.  The  general  business  law  is amended by adding a new article
29-HHH to read as follows:
                             ARTICLE 29-HHH
                        DEBT COLLECTION AGENCIES
SECTION 604-K. DEFINITIONS.
        604-L. DEBT COLLECTION AGENCIES.
        604-M. SURETY BONDING REQUIREMENT.
        604-N. PENALTIES.
        604-O. APPLICABILITY.
  S 604-K. DEFINITIONS. AS USED IN THIS  ARTICLE,  THE  FOLLOWING  TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  1.  (A)  "DEBT  COLLECTION AGENCY" SHALL MEAN A PERSON, FIRM OR CORPO-
RATION ENGAGED IN BUSINESS, THE PRINCIPAL PURPOSE OF WHICH IS  TO  REGU-
LARLY  COLLECT  OR ATTEMPT TO COLLECT DEBTS: (I) OWED OR DUE OR ASSERTED
TO BE OWED OR DUE TO ANOTHER; OR (II) OBTAINED BY, OR ASSIGNED TO,  SUCH
PERSON,  FIRM  OR  CORPORATION,  THAT  ARE  IN  DEFAULT WHEN OBTAINED OR
ACQUIRED BY SUCH PERSON, FIRM OR CORPORATION.
  (B) THE TERM DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDI-
TOR WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDI-
TOR;
  (II) ANY OFFICER OR EMPLOYEE OF A DEBT COLLECTION AGENCY;
  (III) ANY PERSON WHILE ACTING AS A DEBT COLLECTION AGENCY FOR  ANOTHER
PERSON,  BOTH  OF  WHOM ARE RELATED BY COMMON OWNERSHIP OR AFFILIATED BY
CORPORATE CONTROL, IF THE PERSON ACTING AS A DEBT COLLECTION AGENCY DOES
SO ONLY FOR PERSONS TO WHOM IT IS SO RELATED OR AFFILIATED  AND  IF  THE
PRINCIPAL BUSINESS OF SUCH PERSON IS NOT THE COLLECTION OF DEBTS;
  (IV)  ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
ANY OTHER PERSON IN CONNECTION WITH  THE  JUDICIAL  ENFORCEMENT  OF  ANY
DEBT;
  (V) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACITY
ON  BEHALF  OF AND IN THE NAME OF A CLIENT THROUGH LEGAL ACTIVITIES SUCH
AS THE FILING AND PROSECUTION OF LAWSUITS TO REDUCE DEBTS TO  JUDGMENTS,
BUT  NOT ANY ATTORNEY-AT-LAW OR LAW FIRM WHO REGULARLY ENGAGES IN ACTIV-
ITIES TRADITIONALLY ASSOCIATED WITH DEBT COLLECTION, INCLUDING  BUT  NOT
LIMITED TO, SENDING DEMAND LETTERS OR MAKING COLLECTION TELEPHONE CALLS;
  (VI)  ANY  PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS
OF THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
  (VII) ANY PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT OWED  OR
DUE  OR  ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT SUCH ACTIVITY:
(A) IS INCIDENTAL TO A BONA FIDE FIDUCIARY OBLIGATION  OR  A  BONA  FIDE
ESCROW  AGREEMENT;  (B)  CONCERNS  A  DEBT  WHICH WAS ORIGINATED BY SUCH
PERSON; OR (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE  TIME  IT
WAS  OBTAINED  BY  SUCH PERSON AS A SECURED PARTY IN A COMMERCIAL CREDIT
TRANSACTION INVOLVING THE CREDITOR;
  (VIII) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE THEREOF
OR ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT  COLLECTING
OR  ATTEMPTING  TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF HIS OR
HER OFFICIAL DUTIES; OR
  (IX) ANY NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST  OF  CONSUMERS,
PERFORMS  BONA  FIDE CONSUMER CREDIT COUNSELING AND ASSISTS CUSTOMERS IN
THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS.
  2. "CONSUMER" MEANS ANY NATURAL PERSON OBLIGATED  OR  ALLEGEDLY  OBLI-
GATED TO PAY ANY DEBT.

A. 3926--A                          3

  3.  "DEBT" MEANS ANY OBLIGATION OR ALLEGED OBLIGATION OF A CONSUMER TO
PAY MONEY ARISING OUT OF A TRANSACTION IN  WHICH  THE  MONEY,  PROPERTY,
INSURANCE,  OR  SERVICES  WHICH  ARE  THE SUBJECT OF THE TRANSACTION ARE
PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES,  WHETHER  OR  NOT
SUCH OBLIGATION HAS BEEN REDUCED TO JUDGMENT.
  4. "DEPARTMENT" MEANS THE DEPARTMENT OF STATE.
  5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
  6. "SECRETARY" MEANS THE SECRETARY OF STATE.
  S  604-L.  DEBT COLLECTION AGENCIES. 1. ON OR AFTER OCTOBER FIRST, TWO
THOUSAND TEN, IT SHALL BE UNLAWFUL FOR ANY  PERSON  TO  ACT  AS  A  DEBT
COLLECTION  AGENCY WITHOUT FIRST HAVING OBTAINED A LICENSE IN ACCORDANCE
WITH THE PROVISIONS OF THIS ARTICLE, AND WITHOUT FIRST BEING IN  COMPLI-
ANCE WITH ALL OTHER APPLICABLE LAWS, RULES AND REGULATIONS.
  2. (A) ALL LICENSES ISSUED PURSUANT TO THIS ARTICLE SHALL BE VALID FOR
TWO YEARS UNLESS SOONER SUSPENDED OR REVOKED. THE SECRETARY SHALL ESTAB-
LISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
  (B)  THE  ANNUAL  FEE  FOR  A LICENSE OR RENEWAL THEREOF SHALL BE FIVE
HUNDRED DOLLARS.
  3. (A) EACH PERSON APPLYING FOR A DEBT COLLECTION  AGENCY  LICENSE  OR
RENEWAL THEREOF SHALL FILE AN APPLICATION IN SUCH FORM AND DETAIL AS THE
SECRETARY MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS SECTION.
  (B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SECRETARY SHALL
REQUIRE THE FOLLOWING INFORMATION:
  (I) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
  (II) THE BUSINESS NAME, IF OTHER THAN APPLICANT;
  (III)  THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE STREET
AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
  (IV) THE BUSINESS TELEPHONE OF THE APPLICANT;
  (V) THE LENGTH OF TIME THAT THE APPLICANT HAS BEEN A  DEBT  COLLECTION
AGENCY;
  (VI) A STATEMENT INDICATING WHETHER THE APPLICANT HAS:
  (A)  BEEN  CONVICTED  OF  ANY CRIME OR IS A DEBTOR ON ANY UNPAID CIVIL
JUDGMENT RELATING TO WORK AS A DEBT COLLECTION AGENCY; AND
  (B) AT ANY TIME IN THE PAST BEEN ISSUED A  LICENSE  PURSUANT  TO  THIS
ARTICLE, AND IF SO, WHETHER SUCH LICENSE WAS EVER REVOKED OR SUSPENDED;
  (VII)  A  DETAILED  DESCRIPTION  OF  THE BUSINESS PRACTICES OR METHODS
USED, OR INTENDED TO BE USED, BY THE APPLICANT TO CONFIRM  THE  VALIDITY
OF THE DEBTS IT SEEKS TO COLLECT FROM CONSUMERS;
  (VIII)  A SUMMARY OF THE APPLICANT'S RECORD-KEEPING POLICY, INCLUDING,
BUT NOT LIMITED TO:
  (A) THE LENGTH OF TIME THE APPLICANT MAINTAINS, OR  INTENDS  TO  MAIN-
TAIN, RECORDS PERTAINING TO CONSUMERS; AND
  (B)  THE  MANNER IN WHICH THE APPLICANT RECORDS AND STORES, OR INTENDS
TO RECORD AND STORE: CONSUMER CHALLENGES TO THE VALIDITY OF DEBT;  BILL-
ING ERRORS; PAYMENTS MADE BY A CONSUMER; SETTLEMENT AGREEMENTS; INFORMA-
TION  REGARDING PARTIES RESPONSIBLE FOR DEBT; AND ANY STATEMENTS MADE BY
A CONSUMER ALLEGING THAT THE DEBT AROSE FROM IDENTITY THEFT;
  (IX) WHETHER THE APPLICANT REGULARLY SELLS, OR INTENDS TO SELL, DEBTS.
IF THE APPLICANT SELLS, OR INTENDS TO SELL DEBTS, SUCH  APPLICANT  SHALL
BE  REQUIRED  TO PROVIDE THE SECRETARY WITH A SUMMARY OF THE APPLICANT'S
POLICY WITH RESPECT TO THE INFORMATION REGARDING  A  CONSUMER'S  ACCOUNT
THAT IT TRANSMITS, OR WILL TRANSMIT, TO THE PURCHASER OF A DEBT;
  (X)  A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET FORTH
IN THE APPLICATION IS CURRENT AND ACCURATE; AND
  (XI) A COMPLETE SET OF TWO FINGERPRINT CARDS FOR  EACH  PRINCIPAL  AND
OFFICER  OF  THE APPLICANT RECORDED IN SUCH A MANNER AS MAY BE SPECIFIED

A. 3926--A                          4

BY THE DEPARTMENT TOGETHER WITH A FINGERPRINT FEE,  IN  SUCH  AMOUNT  AS
SHALL  BE  DETERMINED  BY THE DEPARTMENT, FOR THE COST OF THE DIVISION'S
FULL SEARCH AND RETAIN PROCEDURES. BEFORE APPROVING AN  APPLICATION,  IT
SHALL  BE THE DUTY OF THE DEPARTMENT TO FORWARD ONE COPY OF SUCH FINGER-
PRINTS TO THE DIVISION. UPON RECEIPT OF SUCH FINGERPRINTS, THE  DIVISION
SHALL, PURSUANT TO ITS FULL SEARCH AND RETAIN PROCEDURES, FORWARD TO THE
DEPARTMENT  A  REPORT  WITH RESPECT TO THE APPLICANT'S PREVIOUS CRIMINAL
HISTORY, IF ANY, OR A STATEMENT THAT THE APPLICANT HAS NO PREVIOUS CRIM-
INAL HISTORY. IF ADDITIONAL COPIES OF  FINGERPRINTS  ARE  REQUIRED,  THE
APPLICANT SHALL FURNISH THEM UPON REQUEST.
  (C)  AN APPLICANT WHO IS A NON-RESIDENT OF THE STATE SHALL PROVIDE THE
NAME AND ADDRESS OF A REGISTERED AGENT WITHIN THE STATE OR DESIGNATE THE
SECRETARY AS HIS OR HER AGENT UPON WHOM PROCESS  OR  OTHER  NOTIFICATION
MAY BE SERVED.
  4.  IN  DETERMINING WHETHER TO ISSUE OR RENEW A LICENSE, THE SECRETARY
OF STATE MAY CONSIDER THE CHARACTER, COMPETENCY  AND  INTEGRITY  OF  THE
APPLICANT.  THE  SECRETARY MAY REFUSE TO ISSUE OR RENEW A LICENSE TO ANY
PERSON, FIRM OR CORPORATION WHOM HE OR SHE FINDS HAS: (A) BEEN CONVICTED
OF ANY CRIME DEFINED IN ARTICLE ONE HUNDRED FIFTY-FIVE OF THE PENAL  LAW
OR ARTICLE TWENTY-TWO-A OF THIS CHAPTER OR FAILED TO PAY ANY FINAL CIVIL
JUDGMENT  RELATING TO WORK AS A DEBT COLLECTION AGENCY, IF SUCH REFUSAL,
IN THE JUDGMENT OF THE SECRETARY, BEST PROMOTES  THE  INTERESTS  OF  THE
PEOPLE OF THIS STATE; OR
  (B) VIOLATED ARTICLE TWENTY-NINE-H OF THIS CHAPTER OR THE FEDERAL FAIR
DEBT COLLECTION PRACTICES ACT (15 USC S 1692 ET SEQ.).
  5.  NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE DEPART-
MENT SHALL BE GIVEN TO THE DEPARTMENT AT ITS OFFICES  IN  ALBANY  WITHIN
TEN DAYS OF CHANGES OF NAME OR ADDRESS BY LICENSED DEBT COLLECTION AGEN-
CIES.  THE FEE FOR FILING EACH CHANGE OF NAME OR ADDRESS NOTICE SHALL BE
TEN DOLLARS.
  6. THE FEES ESTABLISHED BY THIS SECTION SHALL NOT BE REFUNDABLE.
  7.  EACH  DEBT  COLLECTION  AGENCY  ENGAGED  IN COLLECTING DEBTS SHALL
COMMUNICATE HIS OR HER LICENSE NUMBER UPON THE REQUEST OF ANY INTERESTED
PARTY. ANY ADVERTISEMENT, LETTERHEAD, RECEIPT OR OTHER PRINTED MATTER OF
A LICENSEE MUST CONTAIN THE LICENSE NUMBER ASSIGNED TO THE  LICENSEE  BY
THE  DEPARTMENT.  SUCH LICENSE NUMBER SHALL BE CLEARLY AND CONSPICUOUSLY
DISPLAYED.
  8. NO PERSON, FIRM OR CORPORATION SHALL: (A) PRESENT,  OR  ATTEMPT  TO
PRESENT, AS HIS, HER OR ITS OWN, THE LICENSE NUMBER OF ANOTHER;
  (B)  KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE DEPART-
MENT FOR THE PURPOSE OF PROCURING A LICENSE;
  (C) FALSELY REPRESENT THEMSELVES TO  BE  A  LICENSED  DEBT  COLLECTION
AGENCY;
  (D) USE OR ATTEMPT TO USE A LICENSE WHICH HAS EXPIRED;
  (E) OFFER TO PERFORM OR PERFORM ANY COLLECTION OF DEBTS WITHOUT HAVING
A CURRENT LICENSE AS IS REQUIRED UNDER THIS ARTICLE; OR
  (F)  REPRESENT  IN ANY MANNER THAT HIS, HER OR ITS LICENSE CONSTITUTES
AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF  THE  DEBT
COLLECTION AGENCY.
  9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
BLE OR ASSIGNABLE.
  10.  THE  SECRETARY  SHALL  ISSUE EACH DEBT COLLECTION AGENCY A UNIQUE
LICENSE NUMBER.
  11. THE DEPARTMENT SHALL  MAINTAIN  AND  PUBLISH  A  REGISTRY  OF  ALL
LICENSED  DEBT  COLLECTION  AGENCIES, WHICH SHALL LIST AND IDENTIFY, ALL

A. 3926--A                          5

LICENSED DEBT COLLECTION AGENCIES DOING  BUSINESS  IN  THIS  STATE.  THE
DEPARTMENT SHALL MAKE THE REGISTRY AVAILABLE ON ITS WEBSITE.
  12.  (A) THE SECRETARY SHALL ADOPT SUCH RULES AND REGULATIONS AS HE OR
SHE MAY DETERMINE ARE NECESSARY FOR THE ADMINISTRATION  AND  ENFORCEMENT
OF   THIS  ARTICLE,  AND  SHALL  PROVIDE  WRITTEN  NOTIFICATION  OF  THE
PROVISIONS OF THIS ARTICLE TO  ALL  DEBT  COLLECTION  AGENCIES  LICENSED
PURSUANT TO THIS ARTICLE.
  (B)  IN  ADDITION TO ANY OTHER POWERS OF THE SECRETARY, NOT IN LIMITA-
TION THEREOF, HE OR SHE SHALL HAVE THE POWER TO ENFORCE  THE  PROVISIONS
OF  THIS  ARTICLE,  TO INVESTIGATE ANY VIOLATION THEREOF, TO INVESTIGATE
THE BUSINESS, BUSINESS  PRACTICES  AND  BUSINESS  METHODS  OF  ANY  DEBT
COLLECTION  AGENCY, AND TO CONDUCT ROUTINE EXAMINATIONS OF THE FINANCIAL
SOLVENCY OF ANY DEBT COLLECTION AGENCY, IF IN THE OPINION OF THE  SECRE-
TARY,   SUCH  INVESTIGATION  OR  EXAMINATION  IS  WARRANTED.  EACH  DEBT
COLLECTION AGENCY SHALL BE OBLIGED,  ON  REQUEST  OF  THE  SECRETARY  OF
STATE,  TO  SUPPLY  SUCH INFORMATION, BOOKS, PAPERS OR RECORDS AS MAY BE
REQUIRED CONCERNING HIS, HER OR  ITS  BUSINESS,  BUSINESS  PRACTICES  OR
BUSINESS  METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE TO
COMPLY WITH A LAWFUL REQUEST OF THE SECRETARY  SHALL  BE  A  GROUND  FOR
DENYING  AN  APPLICATION  FOR A LICENSE, OR FOR REVOKING, SUSPENDING, OR
FAILING TO RENEW A LICENSE  ISSUED UNDER THIS ARTICLE.
  (C) THE DEPARTMENT SHALL HAVE THE  POWER  TO  REVOKE  OR  SUSPEND  ANY
LICENSE,  OR IN LIEU THEREOF TO IMPOSE A FINE NOT EXCEEDING TWO THOUSAND
DOLLARS PAYABLE TO THE DEPARTMENT, OR REPRIMAND ANY LICENSEE OR DENY  AN
APPLICATION FOR A LICENSE OR RENEWAL THEREOF UPON PROOF:
  (I)  THAT THE APPLICANT OR LICENSEE HAS VIOLATED ANY OF THE PROVISIONS
OF THIS ARTICLE OR THE RULES AND  REGULATIONS  PROMULGATED  PURSUANT  TO
THIS ARTICLE;
  (II)  THAT  THE  APPLICANT  OR LICENSEE HAS PRACTICED FRAUD, DECEIT OR
MISREPRESENTATION;
  (III) THAT THE APPLICANT OR LICENSEE HAS MADE A MATERIAL  MISSTATEMENT
IN THE APPLICATION FOR OR RENEWAL OF HIS OR HER LICENSE; OR
  (IV)  THAT  THE APPLICANT OR LICENSEE HAS DEMONSTRATED INCOMPETENCE OR
UNTRUSTWORTHINESS IN HIS OR HER ACTIONS.
  13. THE DEPARTMENT SHALL BEFORE DENYING AN APPLICATION FOR  A  LICENSE
OR  BEFORE  REVOKING  OR SUSPENDING ANY LICENSE, OR IMPOSING ANY FINE OR
REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE HEAR-
ING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN WRIT-
ING THE APPLICANT, OR THE HOLDER OF SUCH LICENSE, OF ANY CHARGE MADE AND
SHALL AFFORD SUCH APPLICANT OR LICENSEE AN OPPORTUNITY TO  BE  HEARD  IN
PERSON  OR  BY  COUNSEL IN REFERENCE THERETO. SUCH WRITTEN NOTICE MAY BE
SERVED PERSONALLY TO THE APPLICANT OR LICENSEE, OR BY CERTIFIED MAIL  TO
THE LAST KNOWN BUSINESS ADDRESS OF SUCH APPLICANT OR LICENSEE.
  14. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
DEPARTMENT  SHALL  PRESCRIBE  AND  SHALL BE CONDUCTED BY SUCH OFFICER OR
PERSON IN THE DEPARTMENT AS THE SECRETARY OF STATE  MAY  DESIGNATE,  WHO
SHALL HAVE THE POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON
SO  DESIGNATED,  ANY  PERSON IN THIS STATE AND ADMINISTER AN OATH TO AND
TAKE TESTIMONY OF ANY PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN.
A SUBPOENA ISSUED UNDER THIS SECTION SHALL BE  REGULATED  BY  THE  CIVIL
PRACTICE  LAW AND RULES. SUCH OFFICER OR PERSON IN THE DEPARTMENT DESIG-
NATED TO TAKE SUCH TESTIMONY SHALL NOT BE BOUND BY COMMON LAW OR  STATU-
TORY RULES OF EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
  15.  IN  THE EVENT THAT THE DEPARTMENT SHALL DENY THE APPLICATION FOR,
OR REVOKE OR SUSPEND ANY SUCH LICENSE, OR IMPOSE ANY FINE OR  REPRIMAND,
ITS  DETERMINATION  SHALL  BE  IN  WRITING  AND  OFFICIALLY  SIGNED. THE

A. 3926--A                          6

ORIGINAL OF SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED  IN  THE
OFFICE  OF  THE  DEPARTMENT  AND  COPIES  THEREOF SHALL BE MAILED TO THE
APPLICANT OR LICENSEE AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER  SUCH
FILING.
  16.  THE  DEPARTMENT,  ACTING  BY  THE  OFFICE OR PERSON DESIGNATED TO
CONDUCT THE HEARING PURSUANT TO SUBDIVISION THIRTEEN OF THIS SECTION  OR
BY  SUCH  OTHER  OFFICER OR PERSON IN THE DEPARTMENT AS THE SECRETARY OF
STATE MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF  ANY
LICENSEE  WHO  HAS  BEEN  CONVICTED  IN THIS STATE OR ANY OTHER STATE OR
TERRITORY OF A FELONY OR OF ANY MISDEMEANOR FOR A PERIOD  NOT  EXCEEDING
THIRTY  DAYS  PENDING  A  HEARING  AND  A  DETERMINATION OF CHARGES MADE
AGAINST HIM OR HER. IF SUCH HEARING IS ADJOURNED AT THE REQUEST  OF  THE
LICENSEE, OR BY REASON OF ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR
HER  BEHALF,  SUCH SUSPENSION MAY BE CONTINUED FOR THE ADDITIONAL PERIOD
OF SUCH ADJOURNMENT.
  17. THE ACTION OF THE DEPARTMENT IN GRANTING OR REFUSING TO  GRANT  OR
TO  RENEW  A  LICENSE UNDER THIS ARTICLE OR IN REVOKING OR SUSPENDING OR
REFUSING TO REVOKE OR SUSPEND SUCH A LICENSE OR  IMPOSING  ANY  FINE  OR
REPRIMAND  SHALL  BE  SUBJECT TO REVIEW BY A PROCEEDING INSTITUTED UNDER
ARTICLE SEVENTY-EIGHT OF  THE  CIVIL  PRACTICE  LAW  AND  RULES  AT  THE
INSTANCE  OF  THE APPLICANT FOR SUCH LICENSE, THE HOLDER OF A LICENSE SO
REVOKED, SUSPENDED, FINED OR REPRIMANDED.
  18. FOR THE PURPOSE OF THIS ARTICLE, LICENSEES MAY BE HELD RESPONSIBLE
FOR STATEMENTS, REPRESENTATIONS, PROMISES OR ACTS OF THEIR EMPLOYEES  OR
THEIR  AGENTS  WITHIN  THE  SCOPE OF THEIR AUTHORITY; PROVIDED, HOWEVER,
THAT LICENSEES SHALL NOT BE HELD RESPONSIBLE FOR STATEMENTS, REPRESENTA-
TIONS, PROMISES OR ACTS WHICH ARE  CONTRARY  TO  INSTRUCTIONS  OR  WHICH
CONSTITUTE  GROSS  NEGLIGENCE  OR  INTENTIONAL TORTS UNLESS SPECIFICALLY
AUTHORIZED BY THE LICENSEE.
  19. (A) ANY PERSON, FIRM  OR  CORPORATION  THAT  OPERATES  AS  A  DEBT
COLLECTION  AGENCY  WITHOUT  BEING  LICENSED  SHALL BE REQUIRED TO PAY A
CIVIL PENALTY TO THE DEPARTMENT IN THE SUM OF ONE  HUNDRED  DOLLARS  PER
ATTEMPT  TO  COLLECT  A  DEBT IN VIOLATION OF THIS SECTION. HOWEVER, ANY
SUCH PERSON, FIRM OR CORPORATION AGAINST  WHOM  SUCH  PENALTY  HAS  BEEN
ASSESSED  MAY  AVOID  ALL  BUT  FIVE  HUNDRED DOLLARS OF SUCH PENALTY BY
OBTAINING A LICENSE AS REQUIRED BY THIS SECTION, PROVIDED THAT  APPLICA-
TION  FOR  SUCH LICENSE IS MADE NOT MORE THAN TEN DAYS AFTER THE IMPOSI-
TION OF SUCH PENALTY AND THE DEBT COLLECTION AGENCY HAS NEVER RECEIVED A
PRIOR FINE OR FAILURE TO REGISTER IN NEW YORK OR IN ANY OTHER STATE THAT
REQUIRES LICENSURE.
  (B) IN ADDITION TO ANY OTHER PENALTIES, IF A PERSON IS FOUND  TO  HAVE
COMMITTED REPEATED, MULTIPLE OR PERSISTENT VIOLATION OF ANY PROVISION OF
THIS ARTICLE, SUCH PERSON MAY BE RESPONSIBLE FOR THE COST OF THE DEPART-
MENT'S INVESTIGATION.
  S  604-M. SURETY BONDING REQUIREMENT. 1. AS A CONDITION OF OBTAINING A
LICENSE PURSUANT TO THIS ARTICLE, EVERY DEBT COLLECTION AGENCY APPLICANT
WHO IS APPLYING FOR A LICENSE AND EMPLOYS BETWEEN ONE AND FOUR  INDIVID-
UALS  ENGAGED  IN  THE  COLLECTION OF DEBTS SHALL OBTAIN AND CONTINUE IN
FULL FORCE AND EFFECT A BOND,  CONTRACT  OF  INDEMNITY,  OR  IRREVOCABLE
LETTER OF CREDIT, PAYABLE TO THE PEOPLE OF THE STATE OF NEW YORK, IN THE
AMOUNT OF TEN THOUSAND DOLLARS.
  2.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYES BETWEEN FIVE AND NINE INDIVIDUALS ENGAGED IN THE COLLECTION  OF
DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT, PAYABLE  TO  THE

A. 3926--A                          7

PEOPLE  OF  THE STATE OF NEW YORK, IN THE AMOUNT OF TWENTY-FIVE THOUSAND
DOLLARS.
  3.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS TEN OR MORE INDIVIDUALS ENGAGED IN THE COLLECTION OF DEBTS SHALL
OBTAIN AND CONTINUE IN FULL FORCE AND EFFECT A BOND, CONTRACT OF  INDEM-
NITY,  OR  IRREVOCABLE  LETTER  OF  CREDIT, PAYABLE TO THE PEOPLE OF THE
STATE OF NEW YORK, IN THE AMOUNT OF FIFTY THOUSAND DOLLARS.
  4. SUCH SURETY BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE  LETTER  OF
CREDIT  SHALL  BE  CONDITIONED  THAT THE APPLICANT WILL COMPLY WITH THIS
ARTICLE, ARTICLE TWENTY-NINE-H, AND ARTICLE TWENTY-NINE-HH OF THIS CHAP-
TER AND PAY ALL FINES IMPOSED, OR INVESTIGATORY  COSTS  REQUIRED  TO  BE
PAID, PURSUANT TO SUCH ARTICLES.
  5.  RECOVERY AGAINST ANY SURETY BOND, CONTRACT OF INDEMNITY, OR IRREV-
OCABLE LETTER OF CREDIT MAY BE MADE BY THE ATTORNEY GENERAL ON BEHALF OF
THE PEOPLE OF THE STATE OF NEW YORK. THE TOTAL LIABILITY IMPOSED ON  THE
SURETY BOND UNDER THIS SECTION FOR ALL BREACHES OF THE BOND CONDITION IS
LIMITED TO THE FACE AMOUNT OF THE BOND. SUCH LIABILITY IS LIMITED TO THE
AMOUNT OF THE PENALTY OR INVESTIGATORY COSTS. IN NO EVENT WILL THE SURE-
TY  ON  A  BOND BE LIABLE FOR TOTAL CLAIMS IN EXCESS OF THE BOND AMOUNT,
REGARDLESS OF THE NUMBER OR NATURE OF CLAIMS MADE AGAINST  THE  BOND  OR
THE NUMBER OF YEARS THE BOND REMAINED IN FORCE.
  6. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION AND ANY LICENSEE
SHALL  BE  REQUIRED  TO  PROVIDE  THIRTY DAYS NOTICE TO THE SECRETARY OF
STATE PRIOR TO THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAIL-
URE TO MAINTAIN SUCH A BOND SHALL OPERATE TO REVOKE THE LICENSE  OF  THE
DEBT COLLECTION AGENCY UPON NOTICE AND HEARING.
  S  604-N. PENALTIES. WHEREVER THERE SHALL BE A VIOLATION OF THIS ARTI-
CLE, AN APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE  NAME  OF
THE  PEOPLE OF THE STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURIS-
DICTION BY A SPECIAL PROCEEDING TO ISSUE AN INJUNCTION, AND UPON  NOTICE
TO  THE  DEFENDANT OF NOT LESS THAN FIVE DAYS, TO ENJOIN OR RESTRAIN THE
CONTINUANCE OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO  THE  SATISFAC-
TION  OF  THE COURT OR JUSTICE THAT THE DEFENDANT HAS, IN FACT, VIOLATED
THIS SECTION, AN INJUNCTION MAY BE ISSUED  BY  SUCH  COURT  OR  JUSTICE,
ENJOINING AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF
THAT  ANY  PERSON  HAS, IN FACT, BEEN INJURED OR DAMAGED THEREBY. IN ANY
SUCH PROCEEDING, THE COURT MAY MAKE ALLOWANCES TO THE  ATTORNEY  GENERAL
AS  PROVIDED IN PARAGRAPH SIX OF SUBDIVISION (A) OF SECTION EIGHTY-THREE
HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES, AND  DIRECT  RESTITU-
TION.  WHENEVER  THE  COURT  SHALL  DETERMINE  THAT  A VIOLATION OF THIS
SECTION HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL PENALTY OF  NOT  LESS
THAN  ONE  HUNDRED  DOLLARS  NOR MORE THAN TEN THOUSAND DOLLARS FOR EACH
VIOLATION. IN CONNECTION WITH ANY SUCH PROPOSED APPLICATION, THE  ATTOR-
NEY  GENERAL IS AUTHORIZED TO TAKE PROOF AND MAKE A DETERMINATION OF THE
RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE WITH THE CIVIL PRAC-
TICE LAW AND RULES.
  S 604-O. APPLICABILITY. 1.  THIS  ARTICLE  SHALL  APPLY  TO  ALL  DEBT
COLLECTION AGENCIES, PROVIDED, HOWEVER, THAT A POLITICAL SUBDIVISION MAY
IMPOSE  OTHER REQUIREMENTS THAT ARE IN ADDITION TO THE MINIMUM STANDARDS
SET FORTH IN THIS ARTICLE.
  2. THE PROVISIONS OF THIS ARTICLE SHALL NOT BE CONSTRUED TO  LIMIT  IN
ANY WAY THE AUTHORITY OF A POLITICAL SUBDIVISION TO ENACT, IMPLEMENT AND
CONTINUE TO ENFORCE LOCAL LAWS AND REGULATIONS GOVERNING DEBT COLLECTION
AGENCIES  THAT  WERE IN EFFECT PRIOR TO THE EFFECTIVE DATE OF THIS ARTI-

A. 3926--A                          8

CLE, OR TO ENACT, IMPLEMENT AND ENFORCE ANY AMENDMENTS THERETO AFTER THE
EFFECTIVE DATE OF THIS ARTICLE.
  S 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
as  amended  by  chapter  465 of the laws of 1996, is amended to read as
follows:
  (e) License to do business. Where  the  plaintiff's  cause  of  action
against  a  consumer  arises  from the plaintiff's conduct of a business
which is required by state or local law to be licensed by the department
of consumer affairs of the city of New York, the Suffolk county  depart-
ment  of consumer affairs, the Westchester county department of consumer
affairs/weight-measures, the county of Rockland, the  county  of  Putnam
[or], the Nassau county department of consumer affairs OR THE DEPARTMENT
OF  STATE  PURSUANT  TO  ARTICLE TWENTY-NINE-HHH OF THE GENERAL BUSINESS
LAW, the complaint shall allege, as part of the cause  of  action,  that
plaintiff  is  duly  licensed  and shall contain the name and number, if
any, of such license and  the  governmental  agency  which  issued  such
license;  provided,  however,  that  where the plaintiff does not have a
license at the commencement of the action the plaintiff may, subject  to
the provisions of rule thirty hundred twenty-five of this article, amend
the  complaint with the name and number of an after-acquired license and
the name of the governmental agency which issued such  license  or  move
for leave to amend the complaint in accordance with such provisions. The
failure of the plaintiff to comply with this subdivision will permit the
defendant  to move for dismissal pursuant to paragraph seven of subdivi-
sion (a) of rule thirty-two hundred eleven of this chapter.
  S 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
necessary  for  the implementation of this act on its effective date are
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
________________________________________________________________________

                                 3926--B

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 29, 2009
                               ___________

Introduced  by  M.  of  A.  PHEFFER, MILLMAN, FIELDS, COLTON, P. RIVERA,
  GALEF, JAFFEE, GIANARIS, CAHILL, KOON,  ROBINSON,  ROSENTHAL,  STIRPE,
  CLARK,  ESPAILLAT,  HOOPER, BENJAMIN -- Multi-Sponsored by -- M. of A.
  BOYLAND, DelMONTE, GLICK, HOYT,  LANCMAN,  MAGEE,  MAISEL,  MAYERSOHN,
  McENENY,  PERRY, REILLY, J. RIVERA, SCARBOROUGH, SWEENEY, TOWNS, WALK-
  ER, WEISENBERG -- read once and referred to the Committee on  Consumer
  Affairs  and Protection -- committee discharged, bill amended, ordered
  reprinted as amended  and  recommitted  to  said  committee  --  again
  reported  from  said  committee  with amendments, ordered reprinted as
  amended and recommitted to said committee

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:

  Section 1. Legislative intent. The legislature hereby finds the  pres-
ence  of consumer-related problems with respect to the practices of debt
collection agencies. Federal and state laws regulate how debt collectors
may communicate with debtors and prohibit the use of  certain  threaten-
ing,  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
eleventh consecutive year in 2008, and consumers filed with the  Commis-
sion  more  complaints  against  third-party collectors than against any
other specific industry. 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 infor-
mation  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 incumbent upon this legislature to  protect  the  inter-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06743-07-9
              

A. 3926--B                          2

ests,  reputations  and  fiscal well-being of the citizens of this state
against those agencies who would abuse  their  privilege  of  operation.
Therefore,  it  is  herein  declared  that the state should license debt
collection agencies.
  S  2.  The  general  business  law  is amended by adding a new article
29-HHH to read as follows:
                             ARTICLE 29-HHH
                        DEBT COLLECTION AGENCIES
SECTION 604-K. DEFINITIONS.
        604-L. DEBT COLLECTION AGENCIES.
        604-M. SURETY BONDING REQUIREMENT.
        604-N. PENALTIES.
        604-O. APPLICABILITY.
  S 604-K. DEFINITIONS. AS USED IN THIS  ARTICLE,  THE  FOLLOWING  TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  1.  (A)  "DEBT  COLLECTION AGENCY" SHALL MEAN A PERSON, FIRM OR CORPO-
RATION ENGAGED IN BUSINESS, THE PRINCIPAL PURPOSE OF WHICH IS  TO  REGU-
LARLY  COLLECT OR ATTEMPT TO COLLECT DEBTS OWED OR DUE OR ASSERTED TO BE
OWED OR DUE TO ANOTHER AND SHALL ALSO INCLUDE A BUYER OF DELINQUENT DEBT
WHO SEEKS TO COLLECT SUCH DEBT EITHER DIRECTLY OR THROUGH  THE  SERVICES
OF  ANOTHER  BY, INCLUDING BUT NOT LIMITED TO, INITIATING OR USING LEGAL
PROCESSES OR OTHER MEANS TO COLLECT OR ATTEMPT TO COLLECT SUCH DEBT.
  (B) THE TERM DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDI-
TOR WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDI-
TOR;
  (II) ANY OFFICER OR EMPLOYEE OF A DEBT COLLECTION AGENCY;
  (III) ANY PERSON WHILE ACTING AS A DEBT COLLECTION AGENCY FOR  ANOTHER
PERSON,  BOTH  OF  WHOM ARE RELATED BY COMMON OWNERSHIP OR AFFILIATED BY
CORPORATE CONTROL, IF THE PERSON ACTING AS A DEBT COLLECTION AGENCY DOES
SO ONLY FOR PERSONS TO WHOM IT IS SO RELATED OR AFFILIATED  AND  IF  THE
PRINCIPAL BUSINESS OF SUCH PERSON IS NOT THE COLLECTION OF DEBTS;
  (IV)  ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
ANY OTHER PERSON IN CONNECTION WITH  THE  JUDICIAL  ENFORCEMENT  OF  ANY
DEBT;
  (V) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACITY
ON  BEHALF OF AND IN THE NAME OF A CLIENT SOLELY THROUGH ACTIVITIES THAT
MAY  ONLY  BE  PERFORMED  BY  A   LICENSED   ATTORNEY,   BUT   NOT   ANY
ATTORNEY-AT-LAW  OR  LAW  FIRM  OR PART THEREOF WHO REGULARLY ENGAGES IN
ACTIVITIES TRADITIONALLY PERFORMED BY DEBT  COLLECTORS,  INCLUDING,  BUT
NOT  LIMITED  TO,  CONTACTING A DEBTOR THROUGH THE MAIL OR VIA TELEPHONE
WITH THE PURPOSE OF COLLECTING A DEBT OR OTHER ACTIVITIES AS  DETERMINED
BY RULE OF THE SECRETARY;
  (VI)  ANY  PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS
OF THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
  (VII) ANY PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT OWED  OR
DUE  OR  ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT SUCH ACTIVITY:
(A) IS INCIDENTAL TO A BONA FIDE FIDUCIARY OBLIGATION  OR  A  BONA  FIDE
ESCROW  AGREEMENT;  (B)  CONCERNS  A  DEBT  WHICH WAS ORIGINATED BY SUCH
PERSON; OR (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE  TIME  IT
WAS  OBTAINED  BY  SUCH PERSON AS A SECURED PARTY IN A COMMERCIAL CREDIT
TRANSACTION INVOLVING THE CREDITOR;
  (VIII) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE THEREOF
OR ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT  COLLECTING
OR  ATTEMPTING  TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF HIS OR
HER OFFICIAL DUTIES; OR

A. 3926--B                          3

  (IX) ANY NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST  OF  CONSUMERS,
PERFORMS  BONA  FIDE CONSUMER CREDIT COUNSELING AND ASSISTS CUSTOMERS IN
THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS.
  2.  "CONSUMER"  MEANS  ANY NATURAL PERSON OBLIGATED OR ALLEGEDLY OBLI-
GATED TO PAY ANY DEBT.
  3. "DEBT" MEANS ANY OBLIGATION OR ALLEGED OBLIGATION OF A CONSUMER  TO
PAY  MONEY  ARISING  OUT  OF A TRANSACTION IN WHICH THE MONEY, PROPERTY,
INSURANCE, OR SERVICES WHICH ARE THE  SUBJECT  OF  THE  TRANSACTION  ARE
PRIMARILY  FOR  PERSONAL,  FAMILY, OR HOUSEHOLD PURPOSES, WHETHER OR NOT
SUCH OBLIGATION HAS BEEN REDUCED TO JUDGMENT.
  4. "DEPARTMENT" MEANS THE DEPARTMENT OF STATE.
  5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
  6. "SECRETARY" MEANS THE SECRETARY OF STATE.
  S 604-L. DEBT COLLECTION AGENCIES. 1. ON OR AFTER OCTOBER  FIRST,  TWO
THOUSAND  TEN,  IT  SHALL  BE  UNLAWFUL  FOR ANY PERSON TO ACT AS A DEBT
COLLECTION AGENCY WITHOUT FIRST HAVING OBTAINED A LICENSE IN  ACCORDANCE
WITH  THE PROVISIONS OF THIS ARTICLE, AND WITHOUT FIRST BEING IN COMPLI-
ANCE WITH ALL OTHER APPLICABLE LAWS, RULES AND REGULATIONS.
  2. (A) ALL LICENSES ISSUED PURSUANT TO THIS ARTICLE SHALL BE VALID FOR
TWO YEARS UNLESS SOONER SUSPENDED OR REVOKED. THE SECRETARY SHALL ESTAB-
LISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
  (B) THE FEE FOR A LICENSE OR RENEWAL THEREOF  SHALL  BE  FIVE  HUNDRED
DOLLARS.
  3.  (A)  EACH  PERSON APPLYING FOR A DEBT COLLECTION AGENCY LICENSE OR
RENEWAL THEREOF SHALL FILE AN APPLICATION IN SUCH FORM AND DETAIL AS THE
SECRETARY MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS SECTION.
  (B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SECRETARY SHALL
REQUIRE THE FOLLOWING INFORMATION, AND SHALL,  AS  APPROPRIATE,  REQUIRE
SUCH  INFORMATION NOT ONLY OF THE APPLICANT BUT ALSO OF ANY OF ITS PRIN-
CIPALS, PARTNERS, OFFICERS  AND  DIRECTORS,  OR  ANY  PERSON  OR  ENTITY
CONTROLLING AN INTEREST GREATER THAN TEN PERCENT:
  (I) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
  (II) THE BUSINESS NAME, IF OTHER THAN APPLICANT;
  (III)  THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE STREET
AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
  (IV) THE BUSINESS TELEPHONE OF THE APPLICANT;
  (V) THE LENGTH OF TIME THAT THE APPLICANT HAS BEEN A  DEBT  COLLECTION
AGENCY;
  (VI) A STATEMENT INDICATING WHETHER THE APPLICANT HAS:
  (A)  BEEN  CONVICTED  OF  ANY CRIME OR IS A DEBTOR ON ANY UNPAID CIVIL
JUDGMENT RELATING TO WORK AS A DEBT COLLECTION AGENCY; AND
  (B) AT ANY TIME IN THE PAST BEEN ISSUED A  LICENSE  PURSUANT  TO  THIS
ARTICLE,  OR HAS BEEN ISSUED A LICENSE FOR DEBT COLLECTION ACTIVITIES BY
ANY OTHER STATE OR LOCAL AUTHORITY, AND IF SO, WHETHER SUCH LICENSE  WAS
EVER REVOKED OR SUSPENDED;
  (VII)  A  DETAILED  DESCRIPTION  OF  THE BUSINESS PRACTICES OR METHODS
USED, OR INTENDED TO BE USED, BY THE APPLICANT TO CONFIRM  THE  VALIDITY
OF THE DEBTS IT SEEKS TO COLLECT FROM CONSUMERS;
  (VIII)  A SUMMARY OF THE APPLICANT'S RECORD-KEEPING POLICY, INCLUDING,
BUT NOT LIMITED TO:
  (A) THE LENGTH OF TIME THE APPLICANT MAINTAINS, OR  INTENDS  TO  MAIN-
TAIN, RECORDS PERTAINING TO CONSUMERS; AND
  (B)  THE  MANNER IN WHICH THE APPLICANT RECORDS AND STORES, OR INTENDS
TO RECORD AND STORE: CONSUMER CHALLENGES TO THE VALIDITY OF DEBT;  BILL-
ING ERRORS; PAYMENTS MADE BY A CONSUMER; SETTLEMENT AGREEMENTS; INFORMA-

A. 3926--B                          4

TION  REGARDING  PARTIES  RESPONSIBLE FOR DEBT; ANY STATEMENTS MADE BY A
CONSUMER ALLEGING THAT THE DEBT  AROSE  FROM  IDENTITY  THEFT;  AND  ANY
STATEMENTS  MADE BY A CONSUMER STATING THAT THE CONSUMER RECEIVED STATU-
TORILY  EXEMPT INCOME AS DEFINED IN SECTION FIFTY-TWO HUNDRED TWENTY-TWO
OF THE CIVIL PRACTICE LAW AND RULES;
  (IX) WHETHER THE APPLICANT REGULARLY SELLS, OR INTENDS TO SELL, DEBTS.
IF THE APPLICANT SELLS, OR INTENDS TO SELL DEBTS, SUCH  APPLICANT  SHALL
BE  REQUIRED  TO PROVIDE THE SECRETARY WITH A SUMMARY OF THE APPLICANT'S
POLICY WITH RESPECT TO THE INFORMATION REGARDING  A  CONSUMER'S  ACCOUNT
THAT IT TRANSMITS, OR WILL TRANSMIT, TO THE PURCHASER OF A DEBT;
  (X)  A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET FORTH
IN THE APPLICATION IS CURRENT AND ACCURATE; AND
  (XI) A COMPLETE SET OF TWO FINGERPRINT CARDS FOR  EACH  PRINCIPAL  AND
OFFICER  OF  THE APPLICANT RECORDED IN SUCH A MANNER AS MAY BE SPECIFIED
BY THE DEPARTMENT TOGETHER WITH A FINGERPRINT FEE,  IN  SUCH  AMOUNT  AS
SHALL  BE  DETERMINED  BY THE DEPARTMENT, FOR THE COST OF THE DIVISION'S
FULL SEARCH AND RETAIN PROCEDURES. BEFORE APPROVING AN  APPLICATION,  IT
SHALL  BE THE DUTY OF THE DEPARTMENT TO FORWARD ONE COPY OF SUCH FINGER-
PRINTS TO THE DIVISION. UPON RECEIPT OF SUCH FINGERPRINTS, THE  DIVISION
SHALL, PURSUANT TO ITS FULL SEARCH AND RETAIN PROCEDURES, FORWARD TO THE
DEPARTMENT  A  REPORT  WITH RESPECT TO THE APPLICANT'S PREVIOUS CRIMINAL
HISTORY, IF ANY, OR A STATEMENT THAT THE APPLICANT HAS NO PREVIOUS CRIM-
INAL HISTORY. IF ADDITIONAL COPIES OF  FINGERPRINTS  ARE  REQUIRED,  THE
APPLICANT SHALL FURNISH THEM UPON REQUEST.
  (C)  AN APPLICANT WHO IS A NON-RESIDENT OF THE STATE SHALL PROVIDE THE
NAME AND ADDRESS OF A REGISTERED AGENT WITHIN THE STATE OR DESIGNATE THE
SECRETARY AS HIS OR HER AGENT UPON WHOM PROCESS  OR  OTHER  NOTIFICATION
MAY BE SERVED.
  4.  IN  DETERMINING WHETHER TO ISSUE OR RENEW A LICENSE, THE SECRETARY
SHALL CONSIDER THE CHARACTER, COMPETENCY AND INTEGRITY OF THE APPLICANT.
THE SECRETARY MAY REFUSE TO ISSUE OR RENEW A LICENSE TO ANY PERSON, FIRM
OR CORPORATION WHOM HE OR SHE FINDS HAS: (A) BEEN CONVICTED OF ANY CRIME
DEFINED IN ARTICLE ONE HUNDRED FIFTY-FIVE OF THE PENAL  LAW  OR  ARTICLE
TWENTY-TWO-A  OF  THIS CHAPTER OR FAILED TO PAY ANY FINAL CIVIL JUDGMENT
RELATING TO WORK AS A DEBT COLLECTION AGENCY, IF SUCH  REFUSAL,  IN  THE
JUDGMENT  OF THE SECRETARY, BEST PROMOTES THE INTERESTS OF THE PEOPLE OF
THIS STATE; OR
  (B) VIOLATED ARTICLE TWENTY-NINE-H OF THIS CHAPTER OR THE FEDERAL FAIR
DEBT COLLECTION PRACTICES ACT (15 USC S 1692 ET SEQ.).
  5. NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE  DEPART-
MENT  SHALL  BE  GIVEN TO THE DEPARTMENT AT ITS OFFICES IN ALBANY WITHIN
TEN DAYS OF CHANGES OF NAME OR ADDRESS BY LICENSED DEBT COLLECTION AGEN-
CIES.  THE FEE FOR FILING EACH CHANGE OF NAME OR ADDRESS NOTICE SHALL BE
TEN DOLLARS.
  6. THE FEES ESTABLISHED BY THIS SECTION SHALL NOT BE REFUNDABLE.
  7. EACH DEBT COLLECTION  AGENCY  ENGAGED  IN  COLLECTING  DEBTS  SHALL
COMMUNICATE HIS OR HER LICENSE NUMBER UPON THE REQUEST OF ANY INTERESTED
PARTY. ANY ADVERTISEMENT, LETTERHEAD, RECEIPT OR OTHER PRINTED MATTER OF
A  LICENSEE  MUST CONTAIN THE LICENSE NUMBER ASSIGNED TO THE LICENSEE BY
THE DEPARTMENT. SUCH LICENSE NUMBER SHALL BE CLEARLY  AND  CONSPICUOUSLY
DISPLAYED.
  8.  NO  PERSON,  FIRM OR CORPORATION SHALL: (A) PRESENT, OR ATTEMPT TO
PRESENT, AS HIS, HER OR ITS OWN, THE LICENSE NUMBER OF ANOTHER;
  (B) KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE  DEPART-
MENT FOR THE PURPOSE OF PROCURING A LICENSE;

A. 3926--B                          5

  (C)  FALSELY  REPRESENT  THEMSELVES  TO  BE A LICENSED DEBT COLLECTION
AGENCY;
  (D) USE OR ATTEMPT TO USE A LICENSE WHICH HAS EXPIRED;
  (E) OFFER TO PERFORM OR PERFORM ANY COLLECTION OF DEBTS WITHOUT HAVING
A CURRENT LICENSE AS IS REQUIRED UNDER THIS ARTICLE; OR
  (F)  REPRESENT  IN ANY MANNER THAT HIS, HER OR ITS LICENSE CONSTITUTES
AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF  THE  DEBT
COLLECTION AGENCY.
  9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
BLE OR ASSIGNABLE.
  10.  THE  SECRETARY  SHALL  ISSUE EACH DEBT COLLECTION AGENCY A UNIQUE
LICENSE NUMBER.
  11. THE DEPARTMENT SHALL  MAINTAIN  AND  PUBLISH  A  REGISTRY  OF  ALL
LICENSED  DEBT  COLLECTION  AGENCIES, WHICH SHALL LIST AND IDENTIFY, ALL
LICENSED DEBT COLLECTION AGENCIES DOING  BUSINESS  IN  THIS  STATE.  THE
DEPARTMENT SHALL MAKE THE REGISTRY AVAILABLE ON ITS WEBSITE.
  12.  (A) THE SECRETARY SHALL ADOPT SUCH RULES AND REGULATIONS AS HE OR
SHE MAY DETERMINE ARE NECESSARY FOR THE ADMINISTRATION  AND  ENFORCEMENT
OF   THIS  ARTICLE,  AND  SHALL  PROVIDE  WRITTEN  NOTIFICATION  OF  THE
PROVISIONS OF THIS ARTICLE TO  ALL  DEBT  COLLECTION  AGENCIES  LICENSED
PURSUANT TO THIS ARTICLE.
  (B)  IN  ADDITION TO ANY OTHER POWERS OF THE SECRETARY, NOT IN LIMITA-
TION THEREOF, HE OR SHE SHALL HAVE THE POWER TO ENFORCE  THE  PROVISIONS
OF  THIS  ARTICLE,  TO INVESTIGATE ANY VIOLATION THEREOF, TO INVESTIGATE
THE BUSINESS, BUSINESS  PRACTICES  AND  BUSINESS  METHODS  OF  ANY  DEBT
COLLECTION  AGENCY, AND TO CONDUCT ROUTINE EXAMINATIONS OF THE FINANCIAL
SOLVENCY OF ANY DEBT COLLECTION AGENCY, IF IN THE OPINION OF THE  SECRE-
TARY,   SUCH  INVESTIGATION  OR  EXAMINATION  IS  WARRANTED.  EACH  DEBT
COLLECTION AGENCY SHALL BE OBLIGED,  ON  REQUEST  OF  THE  SECRETARY  OF
STATE,  TO  SUPPLY  SUCH INFORMATION, BOOKS, PAPERS OR RECORDS AS MAY BE
REQUIRED CONCERNING HIS, HER OR  ITS  BUSINESS,  BUSINESS  PRACTICES  OR
BUSINESS  METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE TO
COMPLY WITH A LAWFUL REQUEST OF THE SECRETARY  SHALL  BE  A  GROUND  FOR
DENYING  AN  APPLICATION  FOR A LICENSE, OR FOR REVOKING, SUSPENDING, OR
FAILING TO RENEW A LICENSE  ISSUED UNDER THIS ARTICLE.
  (C) THE DEPARTMENT SHALL HAVE THE  POWER  TO  REVOKE  OR  SUSPEND  ANY
LICENSE,  OR IN LIEU THEREOF TO IMPOSE A FINE NOT LESS THAN FIVE HUNDRED
DOLLARS NOR MORE THAN TWO THOUSAND DOLLARS PER  VIOLATION  OR  INSTANCE,
PAYABLE TO THE DEPARTMENT, OR REPRIMAND ANY LICENSEE OR DENY AN APPLICA-
TION FOR A LICENSE OR RENEWAL THEREOF UPON PROOF:
  (I)  THAT THE APPLICANT OR LICENSEE HAS VIOLATED ANY OF THE PROVISIONS
OF THIS ARTICLE OR THE RULES AND  REGULATIONS  PROMULGATED  PURSUANT  TO
THIS ARTICLE;
  (II)  THAT  THE  APPLICANT  OR LICENSEE HAS PRACTICED FRAUD, DECEIT OR
MISREPRESENTATION;
  (III) THAT THE APPLICANT OR LICENSEE HAS MADE A MATERIAL  MISSTATEMENT
IN THE APPLICATION FOR OR RENEWAL OF HIS OR HER LICENSE; OR
  (IV)  THAT  THE APPLICANT OR LICENSEE HAS DEMONSTRATED INCOMPETENCE OR
UNTRUSTWORTHINESS IN HIS OR HER ACTIONS.
  13. THE DEPARTMENT SHALL BEFORE DENYING AN APPLICATION FOR  A  LICENSE
OR  BEFORE  REVOKING  OR SUSPENDING ANY LICENSE, OR IMPOSING ANY FINE OR
REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE HEAR-
ING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN WRIT-
ING THE APPLICANT, OR THE HOLDER OF SUCH LICENSE, OF ANY CHARGE MADE AND
SHALL AFFORD SUCH APPLICANT OR LICENSEE AN OPPORTUNITY TO  BE  HEARD  IN
PERSON  OR  BY  COUNSEL IN REFERENCE THERETO. SUCH WRITTEN NOTICE MAY BE

A. 3926--B                          6

SERVED PERSONALLY TO THE APPLICANT OR LICENSEE, OR BY CERTIFIED MAIL  TO
THE LAST KNOWN BUSINESS ADDRESS OF SUCH APPLICANT OR LICENSEE.
  14. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
DEPARTMENT  SHALL  PRESCRIBE  AND  SHALL BE CONDUCTED BY SUCH OFFICER OR
PERSON IN THE DEPARTMENT AS THE SECRETARY MAY DESIGNATE, WHO SHALL  HAVE
THE  POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON SO DESIG-
NATED, ANY PERSON IN THIS STATE AND  ADMINISTER  AN  OATH  TO  AND  TAKE
TESTIMONY  OF  ANY  PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A
SUBPOENA ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL PRAC-
TICE LAW AND RULES. SUCH OFFICER OR PERSON IN THE DEPARTMENT  DESIGNATED
TO  TAKE  SUCH  TESTIMONY  SHALL NOT BE BOUND BY COMMON LAW OR STATUTORY
RULES OF EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
  15. IN THE EVENT THAT THE DEPARTMENT SHALL DENY THE  APPLICATION  FOR,
OR  REVOKE OR SUSPEND ANY SUCH LICENSE, OR IMPOSE ANY FINE OR REPRIMAND,
ITS DETERMINATION  SHALL  BE  IN  WRITING  AND  OFFICIALLY  SIGNED.  THE
ORIGINAL  OF  SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED IN THE
OFFICE OF THE DEPARTMENT AND COPIES  THEREOF  SHALL  BE  MAILED  TO  THE
APPLICANT  OR LICENSEE AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER SUCH
FILING.
  16. THE DEPARTMENT, ACTING BY  THE  OFFICE  OR  PERSON  DESIGNATED  TO
CONDUCT  THE HEARING PURSUANT TO SUBDIVISION THIRTEEN OF THIS SECTION OR
BY SUCH OTHER OFFICER OR PERSON IN THE DEPARTMENT AS  THE  SECRETARY  OF
STATE  MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF ANY
LICENSEE WHO HAS BEEN CONVICTED IN THIS STATE  OR  ANY  OTHER  STATE  OR
TERRITORY  OF  A FELONY OR OF ANY MISDEMEANOR FOR A PERIOD NOT EXCEEDING
THIRTY DAYS PENDING A  HEARING  AND  A  DETERMINATION  OF  CHARGES  MADE
AGAINST  HIM  OR HER. IF SUCH HEARING IS ADJOURNED AT THE REQUEST OF THE
LICENSEE, OR BY REASON OF ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR
HER BEHALF, SUCH SUSPENSION MAY BE CONTINUED FOR THE  ADDITIONAL  PERIOD
OF SUCH ADJOURNMENT.
  17.  THE  ACTION OF THE DEPARTMENT IN GRANTING OR REFUSING TO GRANT OR
TO RENEW A LICENSE UNDER THIS ARTICLE OR IN REVOKING  OR  SUSPENDING  OR
REFUSING  TO  REVOKE  OR  SUSPEND SUCH A LICENSE OR IMPOSING ANY FINE OR
REPRIMAND SHALL BE SUBJECT TO REVIEW BY A  PROCEEDING  INSTITUTED  UNDER
ARTICLE  SEVENTY-EIGHT  OF  THE  CIVIL  PRACTICE  LAW  AND  RULES AT THE
INSTANCE OF THE APPLICANT FOR SUCH LICENSE, THE HOLDER OF A  LICENSE  SO
REVOKED, SUSPENDED, FINED OR REPRIMANDED.
  18. FOR THE PURPOSE OF THIS ARTICLE, LICENSEES MAY BE HELD RESPONSIBLE
FOR  STATEMENTS, REPRESENTATIONS, PROMISES OR ACTS OF THEIR EMPLOYEES OR
THEIR AGENTS WITHIN THE SCOPE OF  THEIR  AUTHORITY;  PROVIDED,  HOWEVER,
THAT LICENSEES SHALL NOT BE HELD RESPONSIBLE FOR STATEMENTS, REPRESENTA-
TIONS,  PROMISES  OR  ACTS  WHICH  ARE CONTRARY TO INSTRUCTIONS OR WHICH
CONSTITUTE GROSS NEGLIGENCE OR  INTENTIONAL  TORTS  UNLESS  SPECIFICALLY
AUTHORIZED BY THE LICENSEE.
  19.  (A)  ANY  PERSON,  FIRM  OR  CORPORATION  THAT OPERATES AS A DEBT
COLLECTION AGENCY WITHOUT A LICENSE SHALL BE REQUIRED  TO  PAY  A  CIVIL
PENALTY  TO  THE  DEPARTMENT  OF  NOT MORE THAN FIVE HUNDRED DOLLARS PER
ATTEMPT TO COLLECT A DEBT IN VIOLATION OF THIS SECTION.
  (B) IN ADDITION TO ANY OTHER PENALTIES, IF A PERSON IS FOUND  TO  HAVE
COMMITTED  REPEATED,  MULTIPLE OR PERSISTENT VIOLATIONS OF ANY PROVISION
OF THIS ARTICLE, SUCH PERSON MAY BE RESPONSIBLE  FOR  THE  COST  OF  THE
DEPARTMENT'S INVESTIGATION.
  S  604-M. SURETY BONDING REQUIREMENT. 1. AS A CONDITION OF OBTAINING A
LICENSE PURSUANT TO THIS ARTICLE, EVERY DEBT COLLECTION AGENCY APPLICANT
WHO IS APPLYING FOR A LICENSE AND EMPLOYS BETWEEN ONE AND FOUR  INDIVID-
UALS  ENGAGED  IN  THE  COLLECTION OF DEBTS SHALL OBTAIN AND CONTINUE IN

A. 3926--B                          7

FULL FORCE AND EFFECT A BOND,  CONTRACT  OF  INDEMNITY,  OR  IRREVOCABLE
LETTER  OF CREDIT IN THE AMOUNT OF TEN THOUSAND DOLLARS TO BE FILED WITH
THE SECRETARY.
  2.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS BETWEEN FIVE AND NINE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF
DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
TWENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  3.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS BETWEEN TEN AND TWENTY INDIVIDUALS ENGAGED IN THE COLLECTION  OF
DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
FIFTY THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  4.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS TWENTY OR MORE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF  DEBTS
SHALL  OBTAIN  AND CONTINUE IN FULL FORCE AND EFFECT A BOND, CONTRACT OF
INDEMNITY,  OR  IRREVOCABLE  LETTER  OF  CREDIT,  IN   THE   AMOUNT   OF
SEVENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  5.  SUCH  SURETY BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF
CREDIT SHALL BE CONDITIONED THAT THE APPLICANT  WILL  COMPLY  WITH  THIS
ARTICLE, ARTICLE TWENTY-NINE-H, AND ARTICLE TWENTY-NINE-HH OF THIS CHAP-
TER  AND PAY ALL CIVIL PENALTIES, FINES, OR OTHER OBLIGATIONS IMPOSED BY
THE SECRETARY OR A COURT OF LAW,  INVESTIGATORY  COSTS  REQUIRED  TO  BE
PAID,  OR ANY FINAL JUDGMENT AGAINST THE LICENSEE PURSUANT TO SUCH ARTI-
CLES.
  6. THE TOTAL LIABILITY IMPOSED ON THE SURETY BOND UNDER  THIS  SECTION
FOR  ALL BREACHES OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT OF
THE BOND. SUCH LIABILITY IS LIMITED TO THE  AMOUNT  OF  THE  PENALTY  OR
INVESTIGATORY COSTS. IN NO EVENT WILL THE SURETY ON A BOND BE LIABLE FOR
TOTAL  CLAIMS  IN EXCESS OF THE BOND AMOUNT, REGARDLESS OF THE NUMBER OR
NATURE OF CLAIMS MADE AGAINST THE BOND OR THE NUMBER OF YEARS  THE  BOND
REMAINED IN FORCE.
  7. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION AND ANY LICENSEE
SHALL  BE  REQUIRED TO PROVIDE THIRTY DAYS NOTICE TO THE SECRETARY PRIOR
TO THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAILURE TO  MAIN-
TAIN  SUCH  A  BOND  SHALL  OPERATE  TO  REVOKE  THE LICENSE OF THE DEBT
COLLECTION AGENCY UPON NOTICE AND HEARING.
  S 604-N. PENALTIES. 1.  WHEREVER THERE SHALL BE A  VIOLATION  OF  THIS
ARTICLE,  AN APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME
OF THE PEOPLE OF THE STATE OF NEW YORK TO  A  COURT  OR  JUSTICE  HAVING
JURISDICTION  BY  A  SPECIAL PROCEEDING TO ISSUE AN INJUNCTION, AND UPON
NOTICE TO THE DEFENDANT OF  NOT  LESS  THAN  FIVE  DAYS,  TO  ENJOIN  OR
RESTRAIN  THE  CONTINUANCE  OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO
THE SATISFACTION OF THE COURT OR JUSTICE  THAT  THE  DEFENDANT  HAS,  IN
FACT,  VIOLATED  THIS SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT
OR JUSTICE, ENJOINING AND RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT
REQUIRING  PROOF  THAT  ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED
THEREBY. IN ANY SUCH PROCEEDING, THE COURT MAY MAKE  ALLOWANCES  TO  THE
ATTORNEY  GENERAL  AS  PROVIDED  IN  PARAGRAPH SIX OF SUBDIVISION (A) OF
SECTION EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND  RULES,
AND  DIRECT  RESTITUTION.  WHENEVER  THE  COURT  SHALL  DETERMINE THAT A
VIOLATION OF THIS SECTION HAS OCCURRED, THE COURT  MAY  IMPOSE  A  CIVIL
PENALTY  OF NOT LESS THAN ONE HUNDRED DOLLARS NOR MORE THAN TEN THOUSAND

A. 3926--B                          8

DOLLARS FOR EACH VIOLATION. IN CONNECTION WITH ANY SUCH PROPOSED  APPLI-
CATION,  THE  ATTORNEY  GENERAL  IS  AUTHORIZED TO TAKE PROOF AND MAKE A
DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE
WITH THE CIVIL PRACTICE LAW AND RULES.
  2.  ANY PERSON WHO HAS BEEN INJURED BY REASON OF ANY VIOLATION OF THIS
ARTICLE MAY BRING AN ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAW-
FUL ACT OR PRACTICE, AN ACTION TO RECOVER HIS OR HER ACTUAL  DAMAGES  OR
ONE  THOUSAND  DOLLARS,  WHICHEVER IS GREATER, OR BOTH SUCH ACTIONS. 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 THIS ARTICLE. IN THE
CASE OF ANY SUCCESSFUL ACTION TO ENFORCE THE  FOREGOING  LIABILITY,  THE
COURT  SHALL  AWARD  THE  COSTS  OF  THE ACTION TOGETHER WITH REASONABLE
ATTORNEY'S FEES.
  S 604-O. APPLICABILITY. 1.  THIS  ARTICLE  SHALL  APPLY  TO  ALL  DEBT
COLLECTION AGENCIES, PROVIDED, HOWEVER, THAT A POLITICAL SUBDIVISION MAY
IMPOSE  OTHER REQUIREMENTS THAT ARE IN ADDITION TO THE MINIMUM STANDARDS
SET FORTH IN THIS ARTICLE.
  2. THE PROVISIONS OF THIS ARTICLE SHALL NOT BE CONSTRUED TO  LIMIT  IN
ANY WAY THE AUTHORITY OF A POLITICAL SUBDIVISION TO ENACT, IMPLEMENT AND
CONTINUE TO ENFORCE LOCAL LAWS AND REGULATIONS GOVERNING DEBT COLLECTION
AGENCIES  THAT  WERE IN EFFECT PRIOR TO THE EFFECTIVE DATE OF THIS ARTI-
CLE, OR TO ENACT, IMPLEMENT AND ENFORCE ANY AMENDMENTS THERETO AFTER THE
EFFECTIVE DATE OF THIS ARTICLE.
  S 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
as amended by chapter 465 of the laws of 1996, is  amended  to  read  as
follows:
  (e)  License  to  do  business.  Where the plaintiff's cause of action
against a consumer arises from the plaintiff's  conduct  of  a  business
which is required by state or local law to be licensed by the department
of  consumer affairs of the city of New York, the Suffolk county depart-
ment of consumer affairs, the Westchester county department of  consumer
affairs/weight-measures,  the  county  of Rockland, the county of Putnam
[or], the Nassau county department of consumer affairs OR THE DEPARTMENT
OF STATE PURSUANT TO ARTICLE TWENTY-NINE-HHH  OF  THE  GENERAL  BUSINESS
LAW,  the  complaint  shall allege, as part of the cause of action, that
plaintiff is duly licensed and shall contain the  name  and  number,  if
any,  of  such  license  and  the  governmental agency which issued such
license; provided, however, that where the plaintiff  does  not  have  a
license  at the commencement of the action the plaintiff may, subject to
the provisions of rule thirty hundred twenty-five of this article, amend
the complaint with the name and number of an after-acquired license  and
the  name  of  the governmental agency which issued such license or move
for leave to amend the complaint in accordance with such provisions. The
failure of the plaintiff to comply with this subdivision will permit the
defendant to move for dismissal pursuant to paragraph seven of  subdivi-
sion (a) of rule thirty-two hundred eleven of this chapter.
  S 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
necessary for the implementation of this act on its effective  date  are
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
________________________________________________________________________

                                 3926--C

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 29, 2009
                               ___________

Introduced  by  M.  of  A.  PHEFFER, MILLMAN, FIELDS, COLTON, P. RIVERA,
  GALEF, JAFFEE, GIANARIS, CAHILL, KOON,  ROBINSON,  ROSENTHAL,  STIRPE,
  CLARK,  ESPAILLAT,  HOOPER, BENJAMIN -- Multi-Sponsored by -- M. of A.
  BOYLAND, DelMONTE, GLICK, HOYT,  LANCMAN,  MAGEE,  MAISEL,  MAYERSOHN,
  McENENY,  PERRY, REILLY, J. RIVERA, SCARBOROUGH, SWEENEY, TOWNS, WEIS-
  ENBERG -- read once and referred to the Committee on Consumer  Affairs
  and   Protection   --  committee  discharged,  bill  amended,  ordered
  reprinted as amended  and  recommitted  to  said  committee  --  again
  reported  from  said  committee  with amendments, ordered reprinted as
  amended and recommitted to said committee -- 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 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:

  Section 1. Legislative intent. The legislature hereby finds the  pres-
ence  of consumer-related problems with respect to the practices of debt
collection agencies. Federal and state laws regulate how debt collectors
may communicate with debtors and prohibit the use of  certain  threaten-
ing,  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
eleventh consecutive year in 2008, and consumers filed with the  Commis-
sion  more  complaints  against  third-party collectors than against any
other specific industry. 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 infor-
mation  used  in  the course of such agency's everyday business, and the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
A                                                          LBD06743-10-9
              

A. 3926--C                          2

vulnerable position consumers find themselves in when dealing with these
agencies, it is incumbent upon this legislature to  protect  the  inter-
ests,  reputations  and  fiscal well-being of the citizens of this state
against  those  agencies  who  would abuse their privilege of operation.
Therefore, it is herein declared that  the  state  should  license  debt
collection agencies.
  S  2.  The  general  business  law  is amended by adding a new article
29-HHH to read as follows:
                             ARTICLE 29-HHH
                        DEBT COLLECTION AGENCIES
SECTION 604-K. DEFINITIONS.
        604-L. DEBT COLLECTION AGENCIES.
        604-M. SURETY BONDING REQUIREMENT.
        604-N. PENALTIES.
        604-O. APPLICABILITY.
  S 604-K. DEFINITIONS. AS USED IN THIS  ARTICLE,  THE  FOLLOWING  TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  1.  (A)  "DEBT  COLLECTION AGENCY" SHALL MEAN A PERSON, FIRM OR CORPO-
RATION ENGAGED IN BUSINESS, THE PRINCIPAL PURPOSE OF WHICH IS  TO  REGU-
LARLY  COLLECT OR ATTEMPT TO COLLECT DEBTS OWED OR DUE OR ASSERTED TO BE
OWED OR DUE TO ANOTHER AND SHALL ALSO INCLUDE A BUYER OF DELINQUENT DEBT
WHO SEEKS TO COLLECT SUCH DEBT EITHER DIRECTLY OR THROUGH  THE  SERVICES
OF  ANOTHER  BY, INCLUDING BUT NOT LIMITED TO, INITIATING OR USING LEGAL
PROCESSES OR OTHER MEANS TO COLLECT OR ATTEMPT TO COLLECT SUCH DEBT.
  (B) THE TERM DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDI-
TOR WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDI-
TOR;
  (II) ANY OFFICER OR EMPLOYEE OF A DEBT COLLECTION AGENCY;
  (III) ANY PERSON WHILE ACTING AS A DEBT COLLECTION AGENCY FOR  ANOTHER
PERSON,  BOTH  OF  WHOM ARE RELATED BY COMMON OWNERSHIP OR AFFILIATED BY
CORPORATE CONTROL, IF THE PERSON ACTING AS A DEBT COLLECTION AGENCY DOES
SO ONLY FOR PERSONS TO WHOM IT IS SO RELATED OR AFFILIATED  AND  IF  THE
PRINCIPAL BUSINESS OF SUCH PERSON IS NOT THE COLLECTION OF DEBTS;
  (IV)  ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
ANY OTHER PERSON IN CONNECTION WITH  THE  JUDICIAL  ENFORCEMENT  OF  ANY
DEBT;
  (V) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACITY
ON  BEHALF OF AND IN THE NAME OF A CLIENT SOLELY THROUGH ACTIVITIES THAT
MAY  ONLY  BE  PERFORMED  BY  A   LICENSED   ATTORNEY,   BUT   NOT   ANY
ATTORNEY-AT-LAW  OR  LAW  FIRM  OR PART THEREOF WHO REGULARLY ENGAGES IN
ACTIVITIES TRADITIONALLY PERFORMED BY DEBT  COLLECTORS,  INCLUDING,  BUT
NOT  LIMITED  TO,  CONTACTING A DEBTOR THROUGH THE MAIL OR VIA TELEPHONE
WITH THE PURPOSE OF COLLECTING A DEBT OR OTHER ACTIVITIES AS  DETERMINED
BY RULE OF THE SECRETARY;
  (VI)  ANY  PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS
OF THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
  (VII) ANY PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT OWED  OR
DUE  OR  ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT SUCH ACTIVITY:
(A) IS INCIDENTAL TO A BONA FIDE FIDUCIARY OBLIGATION  OR  A  BONA  FIDE
ESCROW  AGREEMENT;  (B)  CONCERNS  A  DEBT  WHICH WAS ORIGINATED BY SUCH
PERSON; OR (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE  TIME  IT
WAS  OBTAINED  BY  SUCH PERSON AS A SECURED PARTY IN A COMMERCIAL CREDIT
TRANSACTION INVOLVING THE CREDITOR;
  (VIII) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE THEREOF
OR ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT  COLLECTING

A. 3926--C                          3

OR  ATTEMPTING  TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF HIS OR
HER OFFICIAL DUTIES;
  (IX)  ANY  NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST OF CONSUMERS,
PERFORMS BONA FIDE CONSUMER CREDIT COUNSELING AND ASSISTS  CUSTOMERS  IN
THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS; OR
  (X) ANY PERSON, FIRM OR CORPORATION ENGAGED IN BUSINESS, THE PRINCIPAL
PURPOSE  OF  WHICH  IS  TO REGULARLY COLLECT OR ATTEMPT TO COLLECT DEBTS
OWED OR DUE OR ASSERTED TO BE OWED OR DUE TO ANOTHER  PERSON  WHERE  THE
DEBT  IS  ENFORCED  FOR  CHILD  SUPPORT, SPOUSAL SUPPORT, MAINTENANCE OR
ALIMONY, PROVIDED, HOWEVER, THAT IF SUCH  PERSON,  FIRM  OR  CORPORATION
ALSO  REGULARLY  COLLECTS  OR ATTEMPTS TO COLLECT DEBTS OTHER THAN THOSE
ENFORCED FOR CHILD SUPPORT, SPOUSAL  SUPPORT,  MAINTENANCE  OR  ALIMONY,
SUCH PERSON MUST COMPLY WITH THE REQUIREMENTS OF THIS ARTICLE.
  2.  "CONSUMER"  MEANS  ANY NATURAL PERSON OBLIGATED OR ALLEGEDLY OBLI-
GATED TO PAY ANY DEBT.
  3. "DEBT" MEANS ANY OBLIGATION OR ALLEGED OBLIGATION OF A CONSUMER  TO
PAY  MONEY  ARISING  OUT  OF A TRANSACTION IN WHICH THE MONEY, PROPERTY,
INSURANCE, OR SERVICES WHICH ARE THE  SUBJECT  OF  THE  TRANSACTION  ARE
PRIMARILY  FOR  PERSONAL,  FAMILY, OR HOUSEHOLD PURPOSES, WHETHER OR NOT
SUCH OBLIGATION HAS BEEN REDUCED TO JUDGMENT.
  4. "DEPARTMENT" MEANS THE DEPARTMENT OF STATE.
  5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
  6. "SECRETARY" MEANS THE SECRETARY OF STATE.
  S 604-L. DEBT COLLECTION AGENCIES. 1. ON OR AFTER OCTOBER  FIRST,  TWO
THOUSAND  TEN,  NO  PERSON SHALL ACT AS A DEBT COLLECTION AGENCY WITHOUT
FIRST HAVING OBTAINED A LICENSE IN ACCORDANCE  WITH  THE  PROVISIONS  OF
THIS  ARTICLE,  AND  WITHOUT  FIRST  BEING  IN COMPLIANCE WITH ALL OTHER
APPLICABLE LAWS, RULES AND REGULATIONS.
  2. (A) ALL LICENSES ISSUED PURSUANT TO THIS ARTICLE SHALL BE VALID FOR
TWO YEARS UNLESS SOONER SUSPENDED OR REVOKED. THE SECRETARY SHALL ESTAB-
LISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
  (B) THE FEE FOR A LICENSE OR RENEWAL THEREOF  SHALL  BE  FIVE  HUNDRED
DOLLARS.
  3.  (A)  EACH  PERSON APPLYING FOR A DEBT COLLECTION AGENCY LICENSE OR
RENEWAL THEREOF SHALL FILE AN APPLICATION IN SUCH FORM AND DETAIL AS THE
SECRETARY MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS SECTION.
  (B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SECRETARY SHALL
REQUIRE THE FOLLOWING INFORMATION, AND SHALL,  AS  APPROPRIATE,  REQUIRE
SUCH  INFORMATION NOT ONLY OF THE APPLICANT BUT ALSO OF ANY OF ITS PRIN-
CIPALS, PARTNERS, OFFICERS  AND  DIRECTORS,  OR  ANY  PERSON  OR  ENTITY
CONTROLLING AN INTEREST GREATER THAN TEN PERCENT:
  (I) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
  (II) THE BUSINESS NAME, IF OTHER THAN APPLICANT;
  (III)  THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE STREET
AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
  (IV) THE BUSINESS TELEPHONE OF THE APPLICANT;
  (V) THE LENGTH OF TIME THAT THE APPLICANT HAS BEEN A  DEBT  COLLECTION
AGENCY;
  (VI) A STATEMENT INDICATING WHETHER THE APPLICANT HAS:
  (A)  BEEN  CONVICTED  OF  ANY CRIME OR IS A DEBTOR ON ANY UNPAID CIVIL
JUDGMENT RELATING TO WORK AS A DEBT COLLECTION AGENCY; AND
  (B) AT ANY TIME IN THE PAST BEEN ISSUED A  LICENSE  PURSUANT  TO  THIS
ARTICLE,  OR HAS BEEN ISSUED A LICENSE FOR DEBT COLLECTION ACTIVITIES BY
ANY OTHER STATE OR LOCAL AUTHORITY, AND IF SO, WHETHER SUCH LICENSE  WAS
EVER REVOKED OR SUSPENDED;

A. 3926--C                          4

  (VII)  A  DETAILED  DESCRIPTION  OF  THE BUSINESS PRACTICES OR METHODS
USED, OR INTENDED TO BE USED, BY THE APPLICANT TO CONFIRM  THE  VALIDITY
OF THE DEBTS IT SEEKS TO COLLECT FROM CONSUMERS;
  (VIII)  A SUMMARY OF THE APPLICANT'S RECORD-KEEPING POLICY, INCLUDING,
BUT NOT LIMITED TO:
  (A) THE LENGTH OF TIME THE APPLICANT MAINTAINS, OR  INTENDS  TO  MAIN-
TAIN, RECORDS PERTAINING TO CONSUMERS; AND
  (B)  THE  MANNER IN WHICH THE APPLICANT RECORDS AND STORES, OR INTENDS
TO RECORD AND STORE: CONSUMER CHALLENGES TO THE VALIDITY OF DEBT;  BILL-
ING ERRORS; PAYMENTS MADE BY A CONSUMER; SETTLEMENT AGREEMENTS; INFORMA-
TION  REGARDING  PARTIES  RESPONSIBLE FOR DEBT; ANY STATEMENTS MADE BY A
CONSUMER ALLEGING THAT THE DEBT  AROSE  FROM  IDENTITY  THEFT;  AND  ANY
STATEMENTS  MADE BY A CONSUMER STATING THAT THE CONSUMER RECEIVED STATU-
TORILY EXEMPT INCOME AS DEFINED IN SECTION FIFTY-TWO HUNDRED  TWENTY-TWO
OF THE CIVIL PRACTICE LAW AND RULES;
  (IX) WHETHER THE APPLICANT REGULARLY SELLS, OR INTENDS TO SELL, DEBTS.
IF  THE  APPLICANT SELLS, OR INTENDS TO SELL DEBTS, SUCH APPLICANT SHALL
BE REQUIRED TO PROVIDE THE SECRETARY WITH A SUMMARY OF  THE  APPLICANT'S
POLICY  WITH  RESPECT  TO THE INFORMATION REGARDING A CONSUMER'S ACCOUNT
THAT IT TRANSMITS, OR WILL TRANSMIT, TO THE PURCHASER OF A DEBT; AND
  (X) A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET  FORTH
IN THE APPLICATION IS CURRENT AND ACCURATE.
  (C)  AN APPLICANT WHO IS A NON-RESIDENT OF THE STATE SHALL PROVIDE THE
NAME AND ADDRESS OF A REGISTERED AGENT WITHIN THE STATE OR DESIGNATE THE
SECRETARY AS HIS OR HER AGENT UPON WHOM PROCESS  OR  OTHER  NOTIFICATION
MAY BE SERVED.
  4.  IN  DETERMINING WHETHER TO ISSUE OR RENEW A LICENSE, THE SECRETARY
SHALL CONSIDER THE CHARACTER, COMPETENCY AND INTEGRITY OF THE APPLICANT.
THE SECRETARY MAY REFUSE TO ISSUE OR RENEW A LICENSE TO ANY PERSON, FIRM
OR CORPORATION WHOM HE OR SHE FINDS HAS: (A) BEEN CONVICTED OF ANY CRIME
DEFINED IN ARTICLE ONE HUNDRED FIFTY-FIVE OF THE PENAL  LAW  OR  ARTICLE
TWENTY-TWO-A  OF  THIS CHAPTER OR FAILED TO PAY ANY FINAL CIVIL JUDGMENT
RELATING TO WORK AS A DEBT COLLECTION AGENCY, IF SUCH  REFUSAL,  IN  THE
JUDGMENT  OF THE SECRETARY, BEST PROMOTES THE INTERESTS OF THE PEOPLE OF
THIS STATE; OR
  (B) VIOLATED ARTICLE TWENTY-NINE-H OF THIS CHAPTER OR THE FEDERAL FAIR
DEBT COLLECTION PRACTICES ACT (15 USC S 1692 ET SEQ.).
  ALL DETERMINATIONS BY THE SECRETARY TO ISSUE OR RENEW A LICENSE  SHALL
BE  MADE  IN  ACCORDANCE WITH SUBDIVISION SIXTEEN OF SECTION TWO HUNDRED
NINETY-SIX OF THE  EXECUTIVE  LAW  AND  ARTICLE  TWENTY-THREE-A  OF  THE
CORRECTION LAW.
  5.  NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE DEPART-
MENT SHALL BE GIVEN TO THE DEPARTMENT AT ITS OFFICES  IN  ALBANY  WITHIN
TEN DAYS OF CHANGES OF NAME OR ADDRESS BY LICENSED DEBT COLLECTION AGEN-
CIES.  THE FEE FOR FILING EACH CHANGE OF NAME OR ADDRESS NOTICE SHALL BE
TEN DOLLARS.
  6. THE FEES ESTABLISHED BY THIS SECTION SHALL NOT BE REFUNDABLE.
  7.  EACH  DEBT  COLLECTION  AGENCY  ENGAGED  IN COLLECTING DEBTS SHALL
COMMUNICATE HIS OR HER LICENSE NUMBER UPON THE REQUEST OF ANY INTERESTED
PARTY. ANY ADVERTISEMENT, LETTERHEAD, RECEIPT OR OTHER PRINTED MATTER OF
A LICENSEE MUST CONTAIN THE LICENSE NUMBER ASSIGNED TO THE  LICENSEE  BY
THE  DEPARTMENT.  SUCH LICENSE NUMBER SHALL BE CLEARLY AND CONSPICUOUSLY
DISPLAYED.
  8. NO PERSON, FIRM OR CORPORATION SHALL: (A) PRESENT,  OR  ATTEMPT  TO
PRESENT, AS HIS, HER OR ITS OWN, THE LICENSE NUMBER OF ANOTHER;

A. 3926--C                          5

  (B)  KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE DEPART-
MENT FOR THE PURPOSE OF PROCURING A LICENSE;
  (C)  FALSELY  REPRESENT  THEMSELVES  TO  BE A LICENSED DEBT COLLECTION
AGENCY;
  (D) USE OR ATTEMPT TO USE A LICENSE WHICH HAS EXPIRED;
  (E) OFFER TO PERFORM OR PERFORM ANY COLLECTION OF DEBTS WITHOUT HAVING
A CURRENT LICENSE AS IS REQUIRED UNDER THIS ARTICLE; OR
  (F) REPRESENT IN ANY MANNER THAT HIS, HER OR ITS  LICENSE  CONSTITUTES
AN  ENDORSEMENT  OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF THE DEBT
COLLECTION AGENCY.
  9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
BLE OR ASSIGNABLE.
  10. THE SECRETARY SHALL ISSUE EACH DEBT  COLLECTION  AGENCY  A  UNIQUE
LICENSE NUMBER.
  11.  THE  DEPARTMENT  SHALL  MAINTAIN  AND  PUBLISH  A REGISTRY OF ALL
LICENSED DEBT COLLECTION AGENCIES, WHICH SHALL LIST  AND  IDENTIFY,  ALL
LICENSED  DEBT  COLLECTION  AGENCIES  DOING  BUSINESS IN THIS STATE. THE
DEPARTMENT SHALL MAKE THE REGISTRY AVAILABLE ON ITS WEBSITE.
  12. (A) THE SECRETARY SHALL ADOPT SUCH RULES AND REGULATIONS AS HE  OR
SHE  MAY  DETERMINE ARE NECESSARY FOR THE ADMINISTRATION AND ENFORCEMENT
OF  THIS  ARTICLE,  AND  SHALL  PROVIDE  WRITTEN  NOTIFICATION  OF   THE
PROVISIONS  OF  THIS  ARTICLE  TO  ALL DEBT COLLECTION AGENCIES LICENSED
PURSUANT TO THIS ARTICLE.
  (B) IN ADDITION TO ANY OTHER POWERS OF THE SECRETARY, NOT  IN  LIMITA-
TION  THEREOF,  HE OR SHE SHALL HAVE THE POWER TO ENFORCE THE PROVISIONS
OF THIS ARTICLE, TO INVESTIGATE ANY VIOLATION  THEREOF,  TO  INVESTIGATE
THE  BUSINESS,  BUSINESS  PRACTICES  AND  BUSINESS  METHODS  OF ANY DEBT
COLLECTION AGENCY, AND TO CONDUCT ROUTINE EXAMINATIONS OF THE  FINANCIAL
SOLVENCY  OF ANY DEBT COLLECTION AGENCY, IF IN THE OPINION OF THE SECRE-
TARY,  SUCH  INVESTIGATION  OR  EXAMINATION  IS  WARRANTED.  EACH   DEBT
COLLECTION  AGENCY  SHALL  BE  OBLIGED,  ON  REQUEST OF THE SECRETARY OF
STATE, TO SUPPLY SUCH INFORMATION, BOOKS, PAPERS OR RECORDS  AS  MAY  BE
REQUIRED  CONCERNING  HIS,  HER  OR  ITS BUSINESS, BUSINESS PRACTICES OR
BUSINESS METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE  TO
COMPLY  WITH  A  LAWFUL  REQUEST  OF THE SECRETARY SHALL BE A GROUND FOR
DENYING AN APPLICATION FOR A LICENSE, OR FOR  REVOKING,  SUSPENDING,  OR
FAILING TO RENEW A LICENSE  ISSUED UNDER THIS ARTICLE.
  (C)  THE  DEPARTMENT  SHALL  HAVE  THE  POWER TO REVOKE OR SUSPEND ANY
LICENSE, OR IN LIEU THEREOF TO IMPOSE A FINE NOT LESS THAN  ONE  HUNDRED
DOLLARS  NOR  MORE  THAN TWO THOUSAND DOLLARS PER VIOLATION OR INSTANCE,
PAYABLE TO THE DEPARTMENT, OR REPRIMAND ANY LICENSEE OR DENY AN APPLICA-
TION FOR A LICENSE OR RENEWAL THEREOF UPON PROOF:
  (I) THAT THE APPLICANT OR LICENSEE HAS VIOLATED ANY OF THE  PROVISIONS
OF  THIS  ARTICLE  OR  THE RULES AND REGULATIONS PROMULGATED PURSUANT TO
THIS ARTICLE;
  (II) THAT THE APPLICANT OR LICENSEE HAS  PRACTICED  FRAUD,  DECEIT  OR
MISREPRESENTATION;
  (III)  THAT THE APPLICANT OR LICENSEE HAS MADE A MATERIAL MISSTATEMENT
IN THE APPLICATION FOR OR RENEWAL OF HIS OR HER LICENSE; OR
  (IV) THAT THE APPLICANT OR LICENSEE HAS DEMONSTRATED  INCOMPETENCE  OR
UNTRUSTWORTHINESS IN HIS OR HER ACTIONS.
  13.  THE  DEPARTMENT SHALL BEFORE DENYING AN APPLICATION FOR A LICENSE
OR BEFORE REVOKING OR SUSPENDING ANY LICENSE, OR IMPOSING  ANY  FINE  OR
REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE HEAR-
ING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN WRIT-
ING THE APPLICANT, OR THE HOLDER OF SUCH LICENSE, OF ANY CHARGE MADE AND

A. 3926--C                          6

SHALL  AFFORD  SUCH  APPLICANT OR LICENSEE AN OPPORTUNITY TO BE HEARD IN
PERSON OR BY COUNSEL IN REFERENCE THERETO. SUCH WRITTEN  NOTICE  MAY  BE
SERVED  PERSONALLY TO THE APPLICANT OR LICENSEE, OR BY CERTIFIED MAIL TO
THE LAST KNOWN BUSINESS ADDRESS OF SUCH APPLICANT OR LICENSEE.
  14. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
DEPARTMENT  SHALL  PRESCRIBE  AND  SHALL BE CONDUCTED BY SUCH OFFICER OR
PERSON IN THE DEPARTMENT AS THE SECRETARY MAY DESIGNATE, WHO SHALL  HAVE
THE  POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON SO DESIG-
NATED, ANY PERSON IN THIS STATE AND  ADMINISTER  AN  OATH  TO  AND  TAKE
TESTIMONY  OF  ANY  PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A
SUBPOENA ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL PRAC-
TICE LAW AND RULES. SUCH OFFICER OR PERSON IN THE DEPARTMENT  DESIGNATED
TO  TAKE  SUCH  TESTIMONY  SHALL NOT BE BOUND BY COMMON LAW OR STATUTORY
RULES OF EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
  15. IN THE EVENT THAT THE DEPARTMENT SHALL DENY THE  APPLICATION  FOR,
OR  REVOKE OR SUSPEND ANY SUCH LICENSE, OR IMPOSE ANY FINE OR REPRIMAND,
ITS DETERMINATION  SHALL  BE  IN  WRITING  AND  OFFICIALLY  SIGNED.  THE
ORIGINAL  OF  SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED IN THE
OFFICE OF THE DEPARTMENT AND COPIES  THEREOF  SHALL  BE  MAILED  TO  THE
APPLICANT  OR LICENSEE AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER SUCH
FILING.
  16. THE DEPARTMENT, ACTING BY  THE  OFFICE  OR  PERSON  DESIGNATED  TO
CONDUCT  THE HEARING PURSUANT TO SUBDIVISION THIRTEEN OF THIS SECTION OR
BY SUCH OTHER OFFICER OR PERSON IN THE DEPARTMENT AS  THE  SECRETARY  OF
STATE  MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF ANY
LICENSEE WHO HAS BEEN CONVICTED IN THIS STATE  OR  ANY  OTHER  STATE  OR
TERRITORY  OF  A FELONY OR OF ANY MISDEMEANOR FOR A PERIOD NOT EXCEEDING
THIRTY DAYS PENDING A  HEARING  AND  A  DETERMINATION  OF  CHARGES  MADE
AGAINST  HIM  OR HER. IF SUCH HEARING IS ADJOURNED AT THE REQUEST OF THE
LICENSEE, OR BY REASON OF ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR
HER BEHALF, SUCH SUSPENSION MAY BE CONTINUED FOR THE  ADDITIONAL  PERIOD
OF SUCH ADJOURNMENT.
  17.  THE  ACTION OF THE DEPARTMENT IN GRANTING OR REFUSING TO GRANT OR
TO RENEW A LICENSE UNDER THIS ARTICLE OR IN REVOKING  OR  SUSPENDING  OR
REFUSING  TO  REVOKE  OR  SUSPEND SUCH A LICENSE OR IMPOSING ANY FINE OR
REPRIMAND SHALL BE SUBJECT TO REVIEW BY A  PROCEEDING  INSTITUTED  UNDER
ARTICLE  SEVENTY-EIGHT  OF  THE  CIVIL  PRACTICE  LAW  AND  RULES AT THE
INSTANCE OF THE APPLICANT FOR SUCH LICENSE, THE HOLDER OF A  LICENSE  SO
REVOKED, SUSPENDED, FINED OR REPRIMANDED.
  18. FOR THE PURPOSE OF THIS ARTICLE, LICENSEES MAY BE HELD RESPONSIBLE
FOR  STATEMENTS, REPRESENTATIONS, PROMISES OR ACTS OF THEIR EMPLOYEES OR
THEIR AGENTS WITHIN THE SCOPE OF  THEIR  AUTHORITY;  PROVIDED,  HOWEVER,
THAT LICENSEES SHALL NOT BE HELD RESPONSIBLE FOR STATEMENTS, REPRESENTA-
TIONS,  PROMISES  OR  ACTS  WHICH  ARE CONTRARY TO INSTRUCTIONS OR WHICH
CONSTITUTE GROSS NEGLIGENCE OR  INTENTIONAL  TORTS  UNLESS  SPECIFICALLY
AUTHORIZED BY THE LICENSEE.
  19.  (A)  ANY  PERSON,  FIRM  OR  CORPORATION  THAT OPERATES AS A DEBT
COLLECTION AGENCY WITHOUT A LICENSE SHALL BE REQUIRED  TO  PAY  A  CIVIL
PENALTY  TO  THE  DEPARTMENT  OF  NOT MORE THAN FIVE HUNDRED DOLLARS PER
ATTEMPT TO COLLECT A DEBT IN VIOLATION OF THIS SECTION.
  (B) IN ADDITION TO ANY OTHER PENALTIES, IF A PERSON IS FOUND  TO  HAVE
COMMITTED  REPEATED,  MULTIPLE OR PERSISTENT VIOLATIONS OF ANY PROVISION
OF THIS ARTICLE, SUCH PERSON MAY BE RESPONSIBLE  FOR  THE  COST  OF  THE
DEPARTMENT'S INVESTIGATION.
  S  604-M. SURETY BONDING REQUIREMENT. 1. AS A CONDITION OF OBTAINING A
LICENSE PURSUANT TO THIS ARTICLE, EVERY DEBT COLLECTION AGENCY APPLICANT

A. 3926--C                          7

WHO IS APPLYING FOR A LICENSE AND EMPLOYS BETWEEN ONE AND FOUR  INDIVID-
UALS  ENGAGED  IN  THE  COLLECTION OF DEBTS SHALL OBTAIN AND CONTINUE IN
FULL FORCE AND EFFECT A BOND,  CONTRACT  OF  INDEMNITY,  OR  IRREVOCABLE
LETTER  OF CREDIT IN THE AMOUNT OF TEN THOUSAND DOLLARS TO BE FILED WITH
THE SECRETARY.
  2. AS A CONDITION TO OBTAINING A LICENSE  PURSUANT  TO  THIS  ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS  BETWEEN  FIVE AND NINE INDIVIDUALS ENGAGED IN THE COLLECTION OF
DEBTS SHALL OBTAIN AND  CONTINUE  IN  FULL  FORCE  AND  EFFECT  A  BOND,
CONTRACT  OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT OF
TWENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  3. AS A CONDITION TO OBTAINING A LICENSE  PURSUANT  TO  THIS  ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS  BETWEEN TEN AND TWENTY INDIVIDUALS ENGAGED IN THE COLLECTION OF
DEBTS SHALL OBTAIN AND  CONTINUE  IN  FULL  FORCE  AND  EFFECT  A  BOND,
CONTRACT  OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT OF
FIFTY THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  4. AS A CONDITION TO OBTAINING A LICENSE  PURSUANT  TO  THIS  ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS  TWENTY  OR  MORE INDIVIDUALS ENGAGED IN THE COLLECTION OF DEBTS
SHALL OBTAIN AND CONTINUE IN FULL FORCE AND EFFECT A BOND,  CONTRACT  OF
INDEMNITY,   OR   IRREVOCABLE   LETTER  OF  CREDIT,  IN  THE  AMOUNT  OF
SEVENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  5. SUCH SURETY BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE  LETTER  OF
CREDIT  SHALL  BE  CONDITIONED  THAT THE APPLICANT WILL COMPLY WITH THIS
ARTICLE, ARTICLE TWENTY-NINE-H, AND ARTICLE TWENTY-NINE-HH OF THIS CHAP-
TER AND PAY ALL CIVIL PENALTIES, FINES, OR OTHER OBLIGATIONS IMPOSED  BY
THE  SECRETARY  OR  A  COURT  OF LAW, INVESTIGATORY COSTS REQUIRED TO BE
PAID, OR ANY FINAL JUDGMENT AGAINST THE LICENSEE PURSUANT TO SUCH  ARTI-
CLES.
  6.  THE  TOTAL LIABILITY IMPOSED ON THE SURETY BOND UNDER THIS SECTION
FOR ALL BREACHES OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT  OF
THE  BOND.  SUCH  LIABILITY  IS  LIMITED TO THE AMOUNT OF THE PENALTY OR
INVESTIGATORY COSTS. IN NO EVENT WILL THE SURETY ON A BOND BE LIABLE FOR
TOTAL CLAIMS IN EXCESS OF THE BOND AMOUNT, REGARDLESS OF THE  NUMBER  OR
NATURE  OF  CLAIMS MADE AGAINST THE BOND OR THE NUMBER OF YEARS THE BOND
REMAINED IN FORCE.
  7. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION AND ANY LICENSEE
SHALL BE REQUIRED TO PROVIDE THIRTY DAYS NOTICE TO THE  SECRETARY  PRIOR
TO  THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAILURE TO MAIN-
TAIN SUCH A BOND SHALL  OPERATE  TO  REVOKE  THE  LICENSE  OF  THE  DEBT
COLLECTION AGENCY UPON NOTICE AND HEARING.
  S  604-N.  PENALTIES. 1.   WHEREVER THERE SHALL BE A VIOLATION OF THIS
ARTICLE, AN APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE  NAME
OF  THE  PEOPLE  OF  THE  STATE OF NEW YORK TO A COURT OR JUSTICE HAVING
JURISDICTION BY A SPECIAL PROCEEDING TO ISSUE AN  INJUNCTION,  AND  UPON
NOTICE  TO  THE  DEFENDANT  OF  NOT  LESS  THAN  FIVE DAYS, TO ENJOIN OR
RESTRAIN THE CONTINUANCE OF SUCH VIOLATION; AND IF IT  SHALL  APPEAR  TO
THE  SATISFACTION  OF  THE  COURT  OR JUSTICE THAT THE DEFENDANT HAS, IN
FACT, VIOLATED THIS SECTION, AN INJUNCTION MAY BE ISSUED BY  SUCH  COURT
OR  JUSTICE,  ENJOINING  AND  RESTRAINING ANY FURTHER VIOLATION, WITHOUT
REQUIRING PROOF THAT ANY PERSON HAS, IN FACT, BEEN  INJURED  OR  DAMAGED
THEREBY.  IN  ANY  SUCH PROCEEDING, THE COURT MAY MAKE ALLOWANCES TO THE
ATTORNEY GENERAL AS PROVIDED IN PARAGRAPH  SIX  OF  SUBDIVISION  (A)  OF
SECTION  EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES,
AND DIRECT RESTITUTION.  WHENEVER  THE  COURT  SHALL  DETERMINE  THAT  A

A. 3926--C                          8

VIOLATION  OF  THIS  SECTION  HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL
PENALTY OF NOT LESS THAN ONE HUNDRED DOLLARS NOR MORE THAN TEN  THOUSAND
DOLLARS  FOR EACH VIOLATION. IN CONNECTION WITH ANY SUCH PROPOSED APPLI-
CATION,  THE  ATTORNEY  GENERAL  IS  AUTHORIZED TO TAKE PROOF AND MAKE A
DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE
WITH THE CIVIL PRACTICE LAW AND RULES.
  2. ANY PERSON WHO HAS BEEN INJURED BY REASON OF ANY VIOLATION OF  THIS
ARTICLE MAY BRING AN ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAW-
FUL  ACT  OR PRACTICE, AN ACTION TO RECOVER HIS OR HER ACTUAL DAMAGES OR
ONE THOUSAND DOLLARS, WHICHEVER IS GREATER, OR BOTH  SUCH  ACTIONS.  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 THIS ARTICLE. IN THE
CASE  OF  ANY  SUCCESSFUL ACTION TO ENFORCE THE FOREGOING LIABILITY, THE
COURT MAY AWARD THE COSTS OF THE ACTION TOGETHER WITH REASONABLE  ATTOR-
NEY'S FEES.
  S  604-O.  APPLICABILITY.  1.  THIS  ARTICLE  SHALL  APPLY TO ALL DEBT
COLLECTION AGENCIES, PROVIDED, HOWEVER, THAT A POLITICAL SUBDIVISION MAY
IMPOSE OTHER REQUIREMENTS THAT ARE IN ADDITION TO THE MINIMUM  STANDARDS
SET FORTH IN THIS ARTICLE.
  2.  THE  PROVISIONS OF THIS ARTICLE SHALL NOT BE CONSTRUED TO LIMIT IN
ANY WAY THE AUTHORITY OF A POLITICAL SUBDIVISION TO ENACT, IMPLEMENT AND
CONTINUE TO ENFORCE LOCAL LAWS AND REGULATIONS GOVERNING DEBT COLLECTION
AGENCIES THAT WERE IN EFFECT PRIOR TO THE EFFECTIVE DATE OF  THIS  ARTI-
CLE, OR TO ENACT, IMPLEMENT AND ENFORCE ANY AMENDMENTS THERETO AFTER THE
EFFECTIVE DATE OF THIS ARTICLE.
  S 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
as  amended  by  chapter  465 of the laws of 1996, is amended to read as
follows:
  (e) License to do business. Where  the  plaintiff's  cause  of  action
against  a  consumer  arises  from the plaintiff's conduct of a business
which is required by state or local law to be licensed by the department
of consumer affairs of the city of New York, the Suffolk county  depart-
ment  of consumer affairs, the Westchester county department of consumer
affairs/weight-measures, the county of Rockland, the  county  of  Putnam
[or], the Nassau county department of consumer affairs OR THE DEPARTMENT
OF  STATE  PURSUANT  TO  ARTICLE TWENTY-NINE-HHH OF THE GENERAL BUSINESS
LAW, the complaint shall allege, as part of the cause  of  action,  that
plaintiff  is  duly  licensed  and shall contain the name and number, if
any, of such license and  the  governmental  agency  which  issued  such
license;  provided,  however,  that  where the plaintiff does not have a
license at the commencement of the action the plaintiff may, subject  to
the provisions of rule thirty hundred twenty-five of this article, amend
the  complaint with the name and number of an after-acquired license and
the name of the governmental agency which issued such  license  or  move
for leave to amend the complaint in accordance with such provisions. The
failure of the plaintiff to comply with this subdivision will permit the
defendant  to move for dismissal pursuant to paragraph seven of subdivi-
sion (a) of rule thirty-two hundred eleven of this chapter.
  S 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
necessary  for  the implementation of this act on its effective date are
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
________________________________________________________________________

                                 3926--D
                                                        Cal. No. 296

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 29, 2009
                               ___________

Introduced  by  M.  of  A.  PHEFFER, MILLMAN, FIELDS, COLTON, P. RIVERA,
  GALEF, JAFFEE, GIANARIS, CAHILL, KOON,  ROBINSON,  ROSENTHAL,  STIRPE,
  CLARK,  ESPAILLAT,  HOOPER, BENJAMIN -- Multi-Sponsored by -- M. of A.
  BOYLAND, DelMONTE, GLICK, HOYT,  LANCMAN,  MAGEE,  MAISEL,  MAYERSOHN,
  McENENY,  PERRY, REILLY, J. RIVERA, SCARBOROUGH, SWEENEY, TOWNS, WEIS-
  ENBERG -- read once and referred to the Committee on Consumer  Affairs
  and   Protection   --  committee  discharged,  bill  amended,  ordered
  reprinted as amended  and  recommitted  to  said  committee  --  again
  reported  from  said  committee  with amendments, ordered reprinted as
  amended and recommitted to said committee -- reported and referred  to
  the  Committee on Codes -- committee discharged, bill amended, ordered
  reprinted as amended  and  recommitted  to  said  committee  --  again
  amended  on special order of third reading, ordered reprinted, retain-
  ing its place on the special order of third reading

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:

  Section 1. Legislative intent. The legislature hereby finds the  pres-
ence  of consumer-related problems with respect to the practices of debt
collection agencies. Federal and state laws regulate how debt collectors
may communicate with debtors and prohibit the use of  certain  threaten-
ing,  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
eleventh consecutive year in 2008, and consumers filed with the  Commis-
sion  more  complaints  against  third-party collectors than against any
other specific industry. 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD06743-20-0

A. 3926--D                          2

that practice abusive tactics. Due to the sensitive nature of the infor-
mation  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  incumbent upon this legislature to protect the inter-
ests, reputations and fiscal well-being of the citizens  of  this  state
against  those  agencies  who  would abuse their privilege of operation.
Therefore, it is herein declared that  the  state  should  license  debt
collection agencies.
  S  2.  The  general  business  law  is amended by adding a new article
29-HHH to read as follows:
                             ARTICLE 29-HHH
                        DEBT COLLECTION AGENCIES
SECTION 604-K. DEFINITIONS.
        604-L. DEBT COLLECTION AGENCIES.
        604-M. SURETY BONDING REQUIREMENT.
        604-N. PENALTIES.
        604-O. APPLICABILITY.
  S 604-K. DEFINITIONS. AS USED IN THIS  ARTICLE,  THE  FOLLOWING  TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  1.  (A)  "DEBT  COLLECTION AGENCY" SHALL MEAN A PERSON, FIRM OR CORPO-
RATION ENGAGED IN BUSINESS, THE PRINCIPAL PURPOSE OF WHICH IS  TO  REGU-
LARLY  COLLECT OR ATTEMPT TO COLLECT DEBTS OWED OR DUE OR ASSERTED TO BE
OWED OR DUE TO ANOTHER AND SHALL ALSO INCLUDE A BUYER OF DELINQUENT DEBT
WHO SEEKS TO COLLECT SUCH DEBT EITHER DIRECTLY OR THROUGH  THE  SERVICES
OF  ANOTHER  BY, INCLUDING BUT NOT LIMITED TO, INITIATING OR USING LEGAL
PROCESSES OR OTHER MEANS TO COLLECT OR ATTEMPT TO COLLECT SUCH DEBT.
  (B) THE TERM DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDI-
TOR WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDI-
TOR;
  (II) ANY OFFICER OR EMPLOYEE OF A DEBT COLLECTION AGENCY;
  (III) ANY PERSON WHILE ACTING AS A DEBT COLLECTION AGENCY FOR  ANOTHER
PERSON,  BOTH  OF  WHOM ARE RELATED BY COMMON OWNERSHIP OR AFFILIATED BY
CORPORATE CONTROL, IF THE PERSON ACTING AS A DEBT COLLECTION AGENCY DOES
SO ONLY FOR PERSONS TO WHOM IT IS SO RELATED OR AFFILIATED  AND  IF  THE
PRINCIPAL BUSINESS OF SUCH PERSON IS NOT THE COLLECTION OF DEBTS;
  (IV)  ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
ANY OTHER PERSON IN CONNECTION WITH  THE  JUDICIAL  ENFORCEMENT  OF  ANY
DEBT;
  (V) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACITY
ON  BEHALF OF AND IN THE NAME OF A CLIENT SOLELY THROUGH ACTIVITIES THAT
MAY  ONLY  BE  PERFORMED  BY  A   LICENSED   ATTORNEY,   BUT   NOT   ANY
ATTORNEY-AT-LAW  OR  LAW  FIRM  OR PART THEREOF WHO REGULARLY ENGAGES IN
ACTIVITIES TRADITIONALLY PERFORMED BY DEBT  COLLECTORS,  INCLUDING,  BUT
NOT  LIMITED  TO,  CONTACTING A DEBTOR THROUGH THE MAIL OR VIA TELEPHONE
WITH THE PURPOSE OF COLLECTING A DEBT OR OTHER ACTIVITIES AS  DETERMINED
BY RULE OF THE SECRETARY;
  (VI)  ANY  PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS
OF THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
  (VII) ANY PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT OWED  OR
DUE  OR  ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT SUCH ACTIVITY:
(A) IS INCIDENTAL TO A BONA FIDE FIDUCIARY OBLIGATION  OR  A  BONA  FIDE
ESCROW  AGREEMENT;  (B)  CONCERNS  A  DEBT  WHICH WAS ORIGINATED BY SUCH
PERSON; OR (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE  TIME  IT
WAS  OBTAINED  BY  SUCH PERSON AS A SECURED PARTY IN A COMMERCIAL CREDIT
TRANSACTION INVOLVING THE CREDITOR;

A. 3926--D                          3

  (VIII) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE THEREOF
OR ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT  COLLECTING
OR  ATTEMPTING  TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF HIS OR
HER OFFICIAL DUTIES;
  (IX)  ANY  NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST OF CONSUMERS,
PERFORMS BONA FIDE CONSUMER CREDIT COUNSELING AND ASSISTS  CUSTOMERS  IN
THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS; OR
  (X) ANY PERSON, FIRM OR CORPORATION ENGAGED IN BUSINESS, THE PRINCIPAL
PURPOSE  OF  WHICH  IS  TO REGULARLY COLLECT OR ATTEMPT TO COLLECT DEBTS
OWED OR DUE OR ASSERTED TO BE OWED OR DUE TO ANOTHER  PERSON  WHERE  THE
DEBT  IS  ENFORCED  FOR  CHILD  SUPPORT, SPOUSAL SUPPORT, MAINTENANCE OR
ALIMONY, PROVIDED, HOWEVER, THAT IF SUCH  PERSON,  FIRM  OR  CORPORATION
ALSO  REGULARLY  COLLECTS  OR ATTEMPTS TO COLLECT DEBTS OTHER THAN THOSE
ENFORCED FOR CHILD SUPPORT, SPOUSAL  SUPPORT,  MAINTENANCE  OR  ALIMONY,
SUCH PERSON MUST COMPLY WITH THE REQUIREMENTS OF THIS ARTICLE.
  2.  "CONSUMER"  MEANS  ANY NATURAL PERSON OBLIGATED OR ALLEGEDLY OBLI-
GATED TO PAY ANY DEBT.
  3. "DEBT" MEANS ANY OBLIGATION OR ALLEGED OBLIGATION OF A CONSUMER  TO
PAY  MONEY  ARISING  OUT  OF A TRANSACTION IN WHICH THE MONEY, PROPERTY,
INSURANCE, OR SERVICES WHICH ARE THE  SUBJECT  OF  THE  TRANSACTION  ARE
PRIMARILY  FOR  PERSONAL,  FAMILY, OR HOUSEHOLD PURPOSES, WHETHER OR NOT
SUCH OBLIGATION HAS BEEN REDUCED TO JUDGMENT.
  4. "DEPARTMENT" MEANS THE DEPARTMENT OF STATE.
  5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
  6. "SECRETARY" MEANS THE SECRETARY OF STATE.
  S 604-L. DEBT COLLECTION AGENCIES. 1. ON OR AFTER OCTOBER  FIRST,  TWO
THOUSAND ELEVEN, NO PERSON SHALL ACT AS A DEBT COLLECTION AGENCY WITHOUT
FIRST  HAVING  OBTAINED  A  LICENSE IN ACCORDANCE WITH THE PROVISIONS OF
THIS ARTICLE, AND WITHOUT FIRST  BEING  IN  COMPLIANCE  WITH  ALL  OTHER
APPLICABLE LAWS, RULES AND REGULATIONS.
  2. (A) ALL LICENSES ISSUED PURSUANT TO THIS ARTICLE SHALL BE VALID FOR
TWO YEARS UNLESS SOONER SUSPENDED OR REVOKED. THE SECRETARY SHALL ESTAB-
LISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
  (B)  THE  FEE  FOR  A LICENSE OR RENEWAL THEREOF SHALL BE FIVE HUNDRED
DOLLARS.
  3. (A) EACH PERSON APPLYING FOR A DEBT COLLECTION  AGENCY  LICENSE  OR
RENEWAL THEREOF SHALL FILE AN APPLICATION IN SUCH FORM AND DETAIL AS THE
SECRETARY MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS SECTION.
  (B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SECRETARY SHALL
REQUIRE  THE  FOLLOWING  INFORMATION, AND SHALL, AS APPROPRIATE, REQUIRE
SUCH INFORMATION NOT ONLY OF THE APPLICANT BUT ALSO OF ANY OF ITS  PRIN-
CIPALS,  PARTNERS,  OFFICERS  AND  DIRECTORS,  OR  ANY  PERSON OR ENTITY
CONTROLLING AN INTEREST GREATER THAN TEN PERCENT:
  (I) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
  (II) THE BUSINESS NAME, IF OTHER THAN APPLICANT;
  (III) THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE  STREET
AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
  (IV) THE BUSINESS TELEPHONE OF THE APPLICANT;
  (V)  THE  LENGTH OF TIME THAT THE APPLICANT HAS BEEN A DEBT COLLECTION
AGENCY;
  (VI) A STATEMENT INDICATING WHETHER THE APPLICANT HAS:
  (A) BEEN CONVICTED OF ANY CRIME OR IS A DEBTOR  ON  ANY  UNPAID  CIVIL
JUDGMENT RELATING TO WORK AS A DEBT COLLECTION AGENCY; AND
  (B)  AT  ANY  TIME  IN THE PAST BEEN ISSUED A LICENSE PURSUANT TO THIS
ARTICLE, OR HAS BEEN ISSUED A LICENSE FOR DEBT COLLECTION ACTIVITIES  BY

A. 3926--D                          4

ANY  OTHER STATE OR LOCAL AUTHORITY, AND IF SO, WHETHER SUCH LICENSE WAS
EVER REVOKED OR SUSPENDED;
  (VII)  A  DETAILED  DESCRIPTION  OF  THE BUSINESS PRACTICES OR METHODS
USED, OR INTENDED TO BE USED, BY THE APPLICANT TO CONFIRM  THE  VALIDITY
OF THE DEBTS IT SEEKS TO COLLECT FROM CONSUMERS;
  (VIII)  A SUMMARY OF THE APPLICANT'S RECORD-KEEPING POLICY, INCLUDING,
BUT NOT LIMITED TO:
  (A) THE LENGTH OF TIME THE APPLICANT MAINTAINS, OR  INTENDS  TO  MAIN-
TAIN, RECORDS PERTAINING TO CONSUMERS; AND
  (B)  THE  MANNER IN WHICH THE APPLICANT RECORDS AND STORES, OR INTENDS
TO RECORD AND STORE: CONSUMER CHALLENGES TO THE VALIDITY OF DEBT;  BILL-
ING ERRORS; PAYMENTS MADE BY A CONSUMER; SETTLEMENT AGREEMENTS; INFORMA-
TION  REGARDING  PARTIES  RESPONSIBLE FOR DEBT; ANY STATEMENTS MADE BY A
CONSUMER ALLEGING THAT THE DEBT  AROSE  FROM  IDENTITY  THEFT;  AND  ANY
STATEMENTS  MADE BY A CONSUMER STATING THAT THE CONSUMER RECEIVED STATU-
TORILY EXEMPT INCOME AS DEFINED IN SECTION FIFTY-TWO HUNDRED  TWENTY-TWO
OF THE CIVIL PRACTICE LAW AND RULES;
  (IX) WHETHER THE APPLICANT REGULARLY SELLS, OR INTENDS TO SELL, DEBTS.
IF  THE  APPLICANT SELLS, OR INTENDS TO SELL DEBTS, SUCH APPLICANT SHALL
BE REQUIRED TO PROVIDE THE SECRETARY WITH A SUMMARY OF  THE  APPLICANT'S
POLICY  WITH  RESPECT  TO THE INFORMATION REGARDING A CONSUMER'S ACCOUNT
THAT IT TRANSMITS, OR WILL TRANSMIT, TO THE PURCHASER OF A DEBT; AND
  (X) A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET  FORTH
IN THE APPLICATION IS CURRENT AND ACCURATE.
  (C)  AN APPLICANT WHO IS A NON-RESIDENT OF THE STATE SHALL PROVIDE THE
NAME AND ADDRESS OF A REGISTERED AGENT WITHIN THE STATE OR DESIGNATE THE
SECRETARY AS HIS OR HER AGENT UPON WHOM PROCESS  OR  OTHER  NOTIFICATION
MAY BE SERVED.
  4.  IN  DETERMINING WHETHER TO ISSUE OR RENEW A LICENSE, THE SECRETARY
SHALL CONSIDER THE CHARACTER, COMPETENCY AND INTEGRITY OF THE APPLICANT.
THE SECRETARY MAY REFUSE TO ISSUE OR RENEW A LICENSE TO ANY PERSON, FIRM
OR CORPORATION WHOM HE OR SHE FINDS HAS: (A) BEEN CONVICTED OF ANY CRIME
DEFINED IN ARTICLE ONE HUNDRED FIFTY-FIVE OF THE PENAL  LAW  OR  ARTICLE
TWENTY-TWO-A  OF  THIS CHAPTER OR FAILED TO PAY ANY FINAL CIVIL JUDGMENT
RELATING TO WORK AS A DEBT COLLECTION AGENCY, IF SUCH  REFUSAL,  IN  THE
JUDGMENT  OF THE SECRETARY, BEST PROMOTES THE INTERESTS OF THE PEOPLE OF
THIS STATE; OR
  (B) VIOLATED ARTICLE TWENTY-NINE-H OF THIS CHAPTER OR THE FEDERAL FAIR
DEBT COLLECTION PRACTICES ACT (15 USC S 1692 ET SEQ.).
  ALL DETERMINATIONS BY THE SECRETARY TO ISSUE OR RENEW A LICENSE  SHALL
BE  MADE  IN  ACCORDANCE WITH SUBDIVISION SIXTEEN OF SECTION TWO HUNDRED
NINETY-SIX OF THE  EXECUTIVE  LAW  AND  ARTICLE  TWENTY-THREE-A  OF  THE
CORRECTION LAW.
  5.  NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE DEPART-
MENT SHALL BE GIVEN TO THE DEPARTMENT AT ITS OFFICES  IN  ALBANY  WITHIN
TEN DAYS OF CHANGES OF NAME OR ADDRESS BY LICENSED DEBT COLLECTION AGEN-
CIES.  THE FEE FOR FILING EACH CHANGE OF NAME OR ADDRESS NOTICE SHALL BE
TEN DOLLARS.
  6. THE FEES ESTABLISHED BY THIS SECTION SHALL NOT BE REFUNDABLE.
  7.  EACH  DEBT  COLLECTION  AGENCY  ENGAGED  IN COLLECTING DEBTS SHALL
COMMUNICATE HIS OR HER LICENSE NUMBER UPON THE REQUEST OF ANY INTERESTED
PARTY. ANY ADVERTISEMENT, LETTERHEAD, RECEIPT OR OTHER PRINTED MATTER OF
A LICENSEE MUST CONTAIN THE LICENSE NUMBER ASSIGNED TO THE  LICENSEE  BY
THE  DEPARTMENT.  SUCH LICENSE NUMBER SHALL BE CLEARLY AND CONSPICUOUSLY
DISPLAYED.

A. 3926--D                          5

  8. NO PERSON, FIRM OR CORPORATION SHALL: (A) PRESENT,  OR  ATTEMPT  TO
PRESENT, AS HIS, HER OR ITS OWN, THE LICENSE NUMBER OF ANOTHER;
  (B)  KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE DEPART-
MENT FOR THE PURPOSE OF PROCURING A LICENSE;
  (C) FALSELY REPRESENT THEMSELVES TO  BE  A  LICENSED  DEBT  COLLECTION
AGENCY;
  (D) USE OR ATTEMPT TO USE A LICENSE WHICH HAS EXPIRED;
  (E) OFFER TO PERFORM OR PERFORM ANY COLLECTION OF DEBTS WITHOUT HAVING
A CURRENT LICENSE AS IS REQUIRED UNDER THIS ARTICLE; OR
  (F)  REPRESENT  IN ANY MANNER THAT HIS, HER OR ITS LICENSE CONSTITUTES
AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF  THE  DEBT
COLLECTION AGENCY.
  9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
BLE OR ASSIGNABLE.
  10.  THE  SECRETARY  SHALL  ISSUE EACH DEBT COLLECTION AGENCY A UNIQUE
LICENSE NUMBER.
  11. THE DEPARTMENT SHALL  MAINTAIN  AND  PUBLISH  A  REGISTRY  OF  ALL
LICENSED  DEBT  COLLECTION  AGENCIES, WHICH SHALL LIST AND IDENTIFY, ALL
LICENSED DEBT COLLECTION AGENCIES DOING  BUSINESS  IN  THIS  STATE.  THE
DEPARTMENT SHALL MAKE THE REGISTRY AVAILABLE ON ITS WEBSITE.
  12.  (A) THE SECRETARY SHALL ADOPT SUCH RULES AND REGULATIONS AS HE OR
SHE MAY DETERMINE ARE NECESSARY FOR THE ADMINISTRATION  AND  ENFORCEMENT
OF   THIS  ARTICLE,  AND  SHALL  PROVIDE  WRITTEN  NOTIFICATION  OF  THE
PROVISIONS OF THIS ARTICLE TO  ALL  DEBT  COLLECTION  AGENCIES  LICENSED
PURSUANT TO THIS ARTICLE.
  (B)  IN  ADDITION TO ANY OTHER POWERS OF THE SECRETARY, NOT IN LIMITA-
TION THEREOF, HE OR SHE SHALL HAVE THE POWER TO ENFORCE  THE  PROVISIONS
OF  THIS  ARTICLE,  TO INVESTIGATE ANY VIOLATION THEREOF, TO INVESTIGATE
THE BUSINESS, BUSINESS  PRACTICES  AND  BUSINESS  METHODS  OF  ANY  DEBT
COLLECTION  AGENCY, AND TO CONDUCT ROUTINE EXAMINATIONS OF THE FINANCIAL
SOLVENCY OF ANY DEBT COLLECTION AGENCY, IF IN THE OPINION OF THE  SECRE-
TARY,   SUCH  INVESTIGATION  OR  EXAMINATION  IS  WARRANTED.  EACH  DEBT
COLLECTION AGENCY SHALL BE OBLIGED,  ON  REQUEST  OF  THE  SECRETARY  OF
STATE,  TO  SUPPLY  SUCH INFORMATION, BOOKS, PAPERS OR RECORDS AS MAY BE
REQUIRED CONCERNING HIS, HER OR  ITS  BUSINESS,  BUSINESS  PRACTICES  OR
BUSINESS  METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE TO
COMPLY WITH A LAWFUL REQUEST OF THE SECRETARY  SHALL  BE  A  GROUND  FOR
DENYING  AN  APPLICATION  FOR A LICENSE, OR FOR REVOKING, SUSPENDING, OR
FAILING TO RENEW A LICENSE  ISSUED UNDER THIS ARTICLE.
  (C) THE DEPARTMENT SHALL HAVE THE  POWER  TO  REVOKE  OR  SUSPEND  ANY
LICENSE,  OR  IN LIEU THEREOF TO IMPOSE A FINE NOT LESS THAN ONE HUNDRED
DOLLARS NOR MORE THAN TWO THOUSAND DOLLARS PER  VIOLATION  OR  INSTANCE,
PAYABLE TO THE DEPARTMENT, OR REPRIMAND ANY LICENSEE OR DENY AN APPLICA-
TION FOR A LICENSE OR RENEWAL THEREOF UPON PROOF:
  (I)  THAT THE APPLICANT OR LICENSEE HAS VIOLATED ANY OF THE PROVISIONS
OF THIS ARTICLE OR THE RULES AND  REGULATIONS  PROMULGATED  PURSUANT  TO
THIS ARTICLE;
  (II)  THAT  THE  APPLICANT  OR LICENSEE HAS PRACTICED FRAUD, DECEIT OR
MISREPRESENTATION;
  (III) THAT THE APPLICANT OR LICENSEE HAS MADE A MATERIAL  MISSTATEMENT
IN THE APPLICATION FOR OR RENEWAL OF HIS OR HER LICENSE; OR
  (IV)  THAT  THE APPLICANT OR LICENSEE HAS DEMONSTRATED INCOMPETENCE OR
UNTRUSTWORTHINESS IN HIS OR HER ACTIONS.
  13. THE DEPARTMENT SHALL BEFORE DENYING AN APPLICATION FOR  A  LICENSE
OR  BEFORE  REVOKING  OR SUSPENDING ANY LICENSE, OR IMPOSING ANY FINE OR
REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE HEAR-

A. 3926--D                          6

ING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN WRIT-
ING THE APPLICANT, OR THE HOLDER OF SUCH LICENSE, OF ANY CHARGE MADE AND
SHALL AFFORD SUCH APPLICANT OR LICENSEE AN OPPORTUNITY TO  BE  HEARD  IN
PERSON  OR  BY  COUNSEL IN REFERENCE THERETO. SUCH WRITTEN NOTICE MAY BE
SERVED PERSONALLY TO THE APPLICANT OR LICENSEE, OR BY CERTIFIED MAIL  TO
THE LAST KNOWN BUSINESS ADDRESS OF SUCH APPLICANT OR LICENSEE.
  14. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
DEPARTMENT  SHALL  PRESCRIBE  AND  SHALL BE CONDUCTED BY SUCH OFFICER OR
PERSON IN THE DEPARTMENT AS THE SECRETARY MAY DESIGNATE, WHO SHALL  HAVE
THE  POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON SO DESIG-
NATED, ANY PERSON IN THIS STATE AND  ADMINISTER  AN  OATH  TO  AND  TAKE
TESTIMONY  OF  ANY  PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A
SUBPOENA ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL PRAC-
TICE LAW AND RULES. SUCH OFFICER OR PERSON IN THE DEPARTMENT  DESIGNATED
TO  TAKE  SUCH  TESTIMONY  SHALL NOT BE BOUND BY COMMON LAW OR STATUTORY
RULES OF EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
  15. IN THE EVENT THAT THE DEPARTMENT SHALL DENY THE  APPLICATION  FOR,
OR  REVOKE OR SUSPEND ANY SUCH LICENSE, OR IMPOSE ANY FINE OR REPRIMAND,
ITS DETERMINATION  SHALL  BE  IN  WRITING  AND  OFFICIALLY  SIGNED.  THE
ORIGINAL  OF  SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED IN THE
OFFICE OF THE DEPARTMENT AND COPIES  THEREOF  SHALL  BE  MAILED  TO  THE
APPLICANT  OR LICENSEE AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER SUCH
FILING.
  16. THE DEPARTMENT, ACTING BY  THE  OFFICE  OR  PERSON  DESIGNATED  TO
CONDUCT  THE HEARING PURSUANT TO SUBDIVISION THIRTEEN OF THIS SECTION OR
BY SUCH OTHER OFFICER OR PERSON IN THE DEPARTMENT AS  THE  SECRETARY  OF
STATE  MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF ANY
LICENSEE WHO HAS BEEN CONVICTED IN THIS STATE  OR  ANY  OTHER  STATE  OR
TERRITORY  OF  A FELONY OR OF ANY MISDEMEANOR FOR A PERIOD NOT EXCEEDING
THIRTY DAYS PENDING A  HEARING  AND  A  DETERMINATION  OF  CHARGES  MADE
AGAINST  HIM  OR HER. IF SUCH HEARING IS ADJOURNED AT THE REQUEST OF THE
LICENSEE, OR BY REASON OF ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR
HER BEHALF, SUCH SUSPENSION MAY BE CONTINUED FOR THE  ADDITIONAL  PERIOD
OF SUCH ADJOURNMENT.
  17.  THE  ACTION OF THE DEPARTMENT IN GRANTING OR REFUSING TO GRANT OR
TO RENEW A LICENSE UNDER THIS ARTICLE OR IN REVOKING  OR  SUSPENDING  OR
REFUSING  TO  REVOKE  OR  SUSPEND SUCH A LICENSE OR IMPOSING ANY FINE OR
REPRIMAND SHALL BE SUBJECT TO REVIEW BY A  PROCEEDING  INSTITUTED  UNDER
ARTICLE  SEVENTY-EIGHT  OF  THE  CIVIL  PRACTICE  LAW  AND  RULES AT THE
INSTANCE OF THE APPLICANT FOR SUCH LICENSE, THE HOLDER OF A  LICENSE  SO
REVOKED, SUSPENDED, FINED OR REPRIMANDED.
  18. FOR THE PURPOSE OF THIS ARTICLE, LICENSEES MAY BE HELD RESPONSIBLE
FOR  STATEMENTS, REPRESENTATIONS, PROMISES OR ACTS OF THEIR EMPLOYEES OR
THEIR AGENTS WITHIN THE SCOPE OF  THEIR  AUTHORITY;  PROVIDED,  HOWEVER,
THAT LICENSEES SHALL NOT BE HELD RESPONSIBLE FOR STATEMENTS, REPRESENTA-
TIONS,  PROMISES  OR  ACTS  WHICH  ARE CONTRARY TO INSTRUCTIONS OR WHICH
CONSTITUTE GROSS NEGLIGENCE OR  INTENTIONAL  TORTS  UNLESS  SPECIFICALLY
AUTHORIZED BY THE LICENSEE.
  19.  (A)  ANY  PERSON,  FIRM  OR  CORPORATION  THAT OPERATES AS A DEBT
COLLECTION AGENCY WITHOUT A LICENSE SHALL BE REQUIRED  TO  PAY  A  CIVIL
PENALTY  TO  THE  DEPARTMENT  OF  NOT MORE THAN FIVE HUNDRED DOLLARS PER
ATTEMPT TO COLLECT A DEBT IN VIOLATION OF THIS SECTION.
  (B) IN ADDITION TO ANY OTHER PENALTIES, IF A PERSON IS FOUND  TO  HAVE
COMMITTED  REPEATED,  MULTIPLE OR PERSISTENT VIOLATIONS OF ANY PROVISION
OF THIS ARTICLE, SUCH PERSON MAY BE RESPONSIBLE  FOR  THE  COST  OF  THE
DEPARTMENT'S INVESTIGATION.

A. 3926--D                          7

  S  604-M. SURETY BONDING REQUIREMENT. 1. AS A CONDITION OF OBTAINING A
LICENSE PURSUANT TO THIS ARTICLE, EVERY DEBT COLLECTION AGENCY APPLICANT
WHO IS APPLYING FOR A LICENSE AND EMPLOYS BETWEEN ONE AND FOUR  INDIVID-
UALS  ENGAGED  IN  THE  COLLECTION OF DEBTS SHALL OBTAIN AND CONTINUE IN
FULL  FORCE  AND  EFFECT  A  BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE
LETTER OF CREDIT IN THE AMOUNT OF TEN THOUSAND DOLLARS TO BE FILED  WITH
THE SECRETARY.
  2.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS BETWEEN FIVE AND NINE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF
DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
TWENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  3.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS BETWEEN TEN AND TWENTY INDIVIDUALS ENGAGED IN THE COLLECTION  OF
DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
FIFTY THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  4.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS TWENTY OR MORE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF  DEBTS
SHALL  OBTAIN  AND CONTINUE IN FULL FORCE AND EFFECT A BOND, CONTRACT OF
INDEMNITY,  OR  IRREVOCABLE  LETTER  OF  CREDIT,  IN   THE   AMOUNT   OF
SEVENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  5.  SUCH  SURETY BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF
CREDIT SHALL BE CONDITIONED THAT THE APPLICANT  WILL  COMPLY  WITH  THIS
ARTICLE, ARTICLE TWENTY-NINE-H, AND ARTICLE TWENTY-NINE-HH OF THIS CHAP-
TER  AND PAY ALL CIVIL PENALTIES, FINES, OR OTHER OBLIGATIONS IMPOSED BY
THE SECRETARY OR A COURT OF LAW,  INVESTIGATORY  COSTS  REQUIRED  TO  BE
PAID,  OR ANY FINAL JUDGMENT AGAINST THE LICENSEE PURSUANT TO SUCH ARTI-
CLES.
  6. THE TOTAL LIABILITY IMPOSED ON THE SURETY BOND UNDER  THIS  SECTION
FOR  ALL BREACHES OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT OF
THE BOND. SUCH LIABILITY IS LIMITED TO THE  AMOUNT  OF  THE  PENALTY  OR
INVESTIGATORY COSTS. IN NO EVENT WILL THE SURETY ON A BOND BE LIABLE FOR
TOTAL  CLAIMS  IN EXCESS OF THE BOND AMOUNT, REGARDLESS OF THE NUMBER OR
NATURE OF CLAIMS MADE AGAINST THE BOND OR THE NUMBER OF YEARS  THE  BOND
REMAINED IN FORCE.
  7. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION AND ANY LICENSEE
SHALL  BE  REQUIRED TO PROVIDE THIRTY DAYS NOTICE TO THE SECRETARY PRIOR
TO THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAILURE TO  MAIN-
TAIN  SUCH  A  BOND  SHALL  OPERATE  TO  REVOKE  THE LICENSE OF THE DEBT
COLLECTION AGENCY UPON NOTICE AND HEARING.
  S 604-N. PENALTIES. 1.  WHEREVER THERE SHALL BE A  VIOLATION  OF  THIS
ARTICLE,  AN APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME
OF THE PEOPLE OF THE STATE OF NEW YORK TO  A  COURT  OR  JUSTICE  HAVING
JURISDICTION  BY  A  SPECIAL PROCEEDING TO ISSUE AN INJUNCTION, AND UPON
NOTICE TO THE DEFENDANT OF  NOT  LESS  THAN  FIVE  DAYS,  TO  ENJOIN  OR
RESTRAIN  THE  CONTINUANCE  OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO
THE SATISFACTION OF THE COURT OR JUSTICE  THAT  THE  DEFENDANT  HAS,  IN
FACT,  VIOLATED  THIS SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT
OR JUSTICE, ENJOINING AND RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT
REQUIRING  PROOF  THAT  ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED
THEREBY. IN ANY SUCH PROCEEDING, THE COURT MAY MAKE  ALLOWANCES  TO  THE
ATTORNEY  GENERAL  AS  PROVIDED  IN  PARAGRAPH SIX OF SUBDIVISION (A) OF

A. 3926--D                          8

SECTION EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND  RULES,
AND  DIRECT  RESTITUTION.  WHENEVER  THE  COURT  SHALL  DETERMINE THAT A
VIOLATION OF THIS SECTION HAS OCCURRED, THE COURT  MAY  IMPOSE  A  CIVIL
PENALTY  OF NOT LESS THAN ONE HUNDRED DOLLARS NOR MORE THAN TEN THOUSAND
DOLLARS FOR EACH VIOLATION. IN CONNECTION WITH ANY SUCH PROPOSED  APPLI-
CATION,  THE  ATTORNEY  GENERAL  IS  AUTHORIZED TO TAKE PROOF AND MAKE A
DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE
WITH THE CIVIL PRACTICE LAW AND RULES.
  2. ANY PERSON WHO HAS BEEN THE SUBJECT OF AN ATTEMPT TO COLLECT A DEBT
BY A DEBT COLLECTION AGENCY THAT IS NOT LICENSED PURSUANT TO THIS  ARTI-
CLE  MAY  BRING AN ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAWFUL
ACT OR PRACTICE, AN ACTION TO RECOVER HIS OR HER ACTUAL DAMAGES OR THREE
THOUSAND FIVE HUNDRED  DOLLARS,  WHICHEVER  IS  GREATER,  OR  BOTH  SUCH
ACTIONS. 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
THIS  ARTICLE. IN THE CASE OF ANY SUCCESSFUL ACTION TO ENFORCE THE FORE-
GOING LIABILITY, THE COURT MAY AWARD THE COSTS OF  THE  ACTION  TOGETHER
WITH REASONABLE ATTORNEY'S FEES.
  S  604-O.  APPLICABILITY.  1. EXCEPT AS PROVIDED IN SUBDIVISION TWO OF
THIS SECTION, THE PROVISIONS OF THIS ARTICLE  SHALL  EXCLUSIVELY  GOVERN
THE LICENSING OF DEBT COLLECTION AGENCIES NOTWITHSTANDING THE PROVISIONS
OF  ANY  OTHER  LAW  TO  THE CONTRARY AND FURTHER, NO LOCAL LAW SHALL BE
ENACTED WHICH SHALL REQUIRE ANY FEE OR  LICENSE  FOR  THE  LICENSURE  OR
REGISTRATION OF DEBT COLLECTION AGENCIES.
  2.  THE  PROVISIONS OF THIS ARTICLE SHALL NOT BE CONSTRUED TO LIMIT IN
ANY WAY THE AUTHORITY OF A POLITICAL SUBDIVISION TO ENACT, IMPLEMENT AND
CONTINUE TO ENFORCE LOCAL LAWS AND REGULATIONS GOVERNING  THE  LICENSURE
OR REGISTRATION OF DEBT COLLECTION AGENCIES THAT WERE IN EFFECT PRIOR TO
THE  EFFECTIVE  DATE OF THIS ARTICLE, OR TO ENACT, IMPLEMENT AND ENFORCE
ANY AMENDMENTS THERETO RELATED TO THE FEE FOR LICENSURE OR  REGISTRATION
AFTER THE EFFECTIVE DATE OF THIS ARTICLE.
  S 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
as  amended  by  chapter  465 of the laws of 1996, is amended to read as
follows:
  (e) License to do business. Where  the  plaintiff's  cause  of  action
against  a  consumer  arises  from the plaintiff's conduct of a business
which is required by state or local law to be licensed by the department
of consumer affairs of the city of New York, the Suffolk county  depart-
ment  of consumer affairs, the Westchester county department of consumer
affairs/weight-measures, the county of Rockland, the  county  of  Putnam
[or], the Nassau county department of consumer affairs OR THE DEPARTMENT
OF  STATE  PURSUANT  TO  ARTICLE TWENTY-NINE-HHH OF THE GENERAL BUSINESS
LAW, the complaint shall allege, as part of the cause  of  action,  that
plaintiff  is  duly  licensed  and shall contain the name and number, if
any, of such license and  the  governmental  agency  which  issued  such
license;  provided,  however,  that  where the plaintiff does not have a
license at the commencement of the action the plaintiff may, subject  to
the provisions of rule thirty hundred twenty-five of this article, amend
the  complaint with the name and number of an after-acquired license and
the name of the governmental agency which issued such  license  or  move
for leave to amend the complaint in accordance with such provisions. The
failure of the plaintiff to comply with this subdivision will permit the
defendant  to move for dismissal pursuant to paragraph seven of subdivi-
sion (a) of rule thirty-two hundred eleven of this chapter.

A. 3926--D                          9

  S 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
necessary  for  the implementation of this act on its effective date are
authorized  and  directed  to  be  made  and completed on or before such
effective date.