Assembly Bill A271A

2009-2010 Legislative Session

Requires debt collectors to send consumers a written notice of their rights under state law along with their debt collection correspondence

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Archive: Last Bill Status - On Floor Calendar

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 12, 2010	amended on third reading (t) 271b
Jan 06, 2010	ordered to third reading cal.14 returned to assembly died in senate
Jul 16, 2009	recommitted to rules 3rd reading cal.307 substituted for s3797
Jun 22, 2009	referred to rules delivered to senate passed assembly
Apr 30, 2009	advanced to third reading cal.413
Apr 27, 2009	reported
Apr 21, 2009	reported referred to codes
Mar 02, 2009	print number 271a
Mar 02, 2009	amend and recommit to consumer affairs and protection
Jan 07, 2009	referred to consumer affairs and protection

Bill Amendments

Original

B (Active)

2009-A271 - Details

See Senate Version of this Bill:: S3797
Law Section:: General Business Law
Versions Introduced in 2011-2012 Legislative Session:: A891

2009-A271 - Summary

Requires debt collectors to send consumers a written notice of their rights under state law along with their initial debt collection correspondence; such notice would contain information such as who and when a principal creditor may contact a debtor about the debt owed as well as the fact that a principal creditor cannot disclose information affecting a consumer debtor's reputation for creditworthiness if the principal creditor knows or has reason to know such information is false; applies to consumer rather than commercial debts.

2009-A271 - Sponsor Memo

                                BILL NUMBER:A271

TITLE OF BILL:  An act to amend the general business law, in relation to
debt collection notices

PURPOSE OR GENERAL IDEA OF BILL:  To provide a "Debtor's Bill of Rights"
to inform consumers of certain provisions of New York's debt collection
practices law.
SUMMARY OF PROVISIONS:
This bill would set forth a specific notice to consumers, to be included
in each initial correspondence on a past due debt, of such consumer's
rights under the New York law regulating debt collection practices. The
notice would contain information such as who and when a principal credi-
tor may contact a debtor about the debt owed as well as the fact that a
principal creditor cannot disclose information affecting a consumer
debtor's reputation for creditworthiness if the principal creditor knows
or has reasons to know that the information is false. The bill also
clarifies the notice regarding permissible contact with a debtor's
employer (Debtor's Bill of Rights paragraph 2).
Adds a new section 601-a to the general business law and amends section
602 of such law.
JUSTIFICATION:
Debt is a fact of many consumer's lives. Some manage their debt without
a problem - others do not. Consumers who cannot manage their debt may
find themselves the subjects of debt collection. Faced with the inabili-
ty to pay off a loan or credit card bill, consumers are contacted by

creditors as well as professional debt collectors. Abuses have arisen in
the debt collection area.  Creditors and debt collectors have contacted
consumers at work in ways that violate the law; late at night and
through unauthorized third parties. With consumer debt dramatically
increasing through the 1980's, these practices proliferated. In fact,
there have been reports of principal creditors parking a hearse in front
of an individual's home with "A deadbeat lives here" written on it.
These and other practices are not only outside the law, they are outra-
geous and must stop.
An effective way to curb abuses of the law and provide benefits to
consumers and businesses is to inform consumers of the limitations
placed on principal creditors by New York Law. Consumers deserve to be
treated fairly and reasonably, even when they have outstanding debts. At
the same time, business benefits from consumers paying their debts.  If
debts are not paid, the cost of business increases - harming the busi-
ness, competition and consumers.

PRIOR LEGISLATIVE HISTORY:

2007-2008: A.221 - Passed Assembly
2005-2006: A.614 - advanced to Third Reading
2003-2004: A.3549 - advanced to Third Reading Cal. 38
FISCAL IMPLICATIONS:  None to the State.

EFFECTIVE DATE:  This act shall take effect on the first day of January
next succeeding the date on which it shall have become law.

2009-A271 - Bill Text download pdf

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

                                   271

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced by M. of A. PHEFFER, GIANARIS, CLARK, GREENE, ORTIZ, MILLMAN,
  ROBINSON, J. RIVERA, BENJAMIN, GABRYSZAK, N. RIVERA -- Multi-Sponsored
  by  --  M.  of  A.  ALFANO,  AUBRY,  BARRA, BRENNAN, COOK, CYMBROWITZ,
  DelMONTE, DIAZ, EDDINGTON,  ENGLEBRIGHT,  FARRELL,  GLICK,  GOTTFRIED,
  HOOPER,  HOYT,  JACOBS,  LIFTON,  LUPARDO,  MAGEE, MAGNARELLI, PAULIN,
  PERRY, PRETLOW,  SCARBOROUGH,  SEMINERIO,  TOWNS,  WALKER,  WEINSTEIN,
  WEISENBERG  --  read  once  and  referred to the Committee on Consumer
  Affairs and Protection

AN ACT to amend the general business law, in relation to debt collection
  notices

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.    The  general  business  law  is amended by adding a new
section 601-a to read as follows:
  S 601-A. DEBT COLLECTION NOTICE TO CONSUMERS. EACH AND EVERY PRINCIPAL
CREDITOR SHALL INCLUDE IN EACH INITIAL CORRESPONDENCE ON A PAST DUE DEBT
TO A DEBTOR A CLEAR AND CONSPICUOUS WRITTEN STATEMENT OF  AT  LEAST  THE
FOLLOWING  ITEMS, IN SUBSTANTIALLY THE FOLLOWING FORM, TO BE CLEARLY AND
CONSPICUOUSLY LABELED "DEBTOR'S BILL OF RIGHTS":
                         DEBTOR'S BILL OF RIGHTS
  AS A DEBTOR WHO OWES OR MAY OWE A CONSUMER CLAIM, YOU ARE  GIVEN  SOME
PROTECTION  AND  RIGHTS  BY  THE NEW YORK LAW REGULATING DEBT COLLECTION
PROCEDURES.  NEW YORK LAW PROTECTS YOU AGAINST  CERTAIN  ACTS  BY  BUSI-
NESSES  KNOWN  AS "PRINCIPAL CREDITORS". THESE BUSINESSES INCLUDE CREDI-
TORS THEMSELVES, LIKE THE STORE YOU MIGHT  OWE  MONEY  TO,  AS  WELL  AS
COLLECTION  AGENCIES  WHICH  MIGHT  BE  HIRED  BY THE STORE TO COLLECT A
CONSUMER CLAIM.  YOU SHOULD BE AWARE OF YOUR RIGHTS AND NOT PERMIT  YOUR
RIGHTS TO BE VIOLATED.  SOME, NOT ALL, OF THE MORE IMPORTANT PROTECTIONS
ARE HIGHLIGHTED BELOW.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03055-01-9

A. 271                              2

  1.  A  PRINCIPAL CREDITOR MAY CONTACT YOU OR ANY MEMBER OF YOUR FAMILY
OR HOUSEHOLD DIRECTLY. HOWEVER, THEY  MAY  NOT  CONTACT  YOU  WITH  SUCH
FREQUENCY,  AT  UNUSUAL  HOURS,  OR  IN A MANNER THAT CAN BE EXPECTED TO
ABUSE OR HARASS YOU. THEY ALSO CANNOT THREATEN ACTION WHICH THEY DO  NOT
TAKE IN THE USUAL COURSE OF BUSINESS.
  2.  A  PRINCIPAL  CREDITOR  MAY  NOT THREATEN TO CONTACT YOUR EMPLOYER
REGARDING A DEBT PRIOR  TO  OBTAINING  A  FINAL  JUDGMENT  AGAINST  YOU.
HOWEVER,  A  PRINCIPAL  CREDITOR  MAY CONTACT YOUR EMPLOYER TO EXECUTE A
WAGE ASSIGNMENT AGREEMENT IF YOU, THE DEBTOR, HAVE AGREED TO THE ASSIGN-
MENT.
  3. A PRINCIPAL CREDITOR CANNOT USE A COMMUNICATION WHICH APPEARS TO BE
AUTHORIZED, ISSUED, OR APPROVED BY A GOVERNMENT AGENCY OR ATTORNEY  WHEN
IT IS NOT.
  4. A PRINCIPAL CREDITOR CANNOT DISCLOSE OR THREATEN TO DISCLOSE INFOR-
MATION AFFECTING YOUR REPUTATION FOR CREDITWORTHINESS IF IT KNOWS OR HAS
REASON  TO  KNOW  THE  INFORMATION  IS  FALSE. A PRINCIPAL CREDITOR ALSO
CANNOT ATTEMPT OR THREATEN TO ENFORCE A  RIGHT  WHEN  IT  KNOWS  OR  HAS
REASON TO KNOW THE RIGHT DOES NOT EXIST.
  S  2.  Subdivision  1  of  section 602 of the general business law, as
added by chapter 753 of the laws of 1973, is amended to read as follows:
  1. Except as otherwise provided by law, any person who [shall violate]
VIOLATES the terms OF SECTION SIX HUNDRED ONE of this article [shall be]
IS guilty of a misdemeanor, and each such violation shall  be  deemed  a
separate offense. A VIOLATION BY ANY PERSON OF SECTION SIX HUNDRED ONE-A
OF THIS ARTICLE, IF SUCH VIOLATION CONSTITUTES THE FIRST SUCH OFFENSE BY
SUCH  PERSON, IS PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED TWO HUNDRED
FIFTY DOLLARS.  THE SECOND OFFENSE AND ANY OFFENSE COMMITTED  THEREAFTER
ARE PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED FIVE HUNDRED DOLLARS.
  S  3. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

co-Sponsors

View additional co-sponsors

multi-Sponsors

View additional multi-sponsors

2009-A271A - Details

See Senate Version of this Bill:: S3797
Law Section:: General Business Law
Versions Introduced in 2011-2012 Legislative Session:: A891

2009-A271A - Summary

2009-A271A - Bill Text download pdf

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

                                 271--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by M. of A. PHEFFER, GIANARIS, CLARK, ORTIZ, MILLMAN, ROBIN-
  SON, J. RIVERA, BENJAMIN, GABRYSZAK, N. RIVERA, JAFFEE --  Multi-Spon-
  sored  by -- M. of A. ALFANO, AUBRY, BARRA, BRENNAN, COOK, CYMBROWITZ,
  DelMONTE,  ENGLEBRIGHT,  FARRELL,  GLICK,  GOTTFRIED,  HOOPER,   HOYT,
  JACOBS,  LIFTON,  LUPARDO,  MAGEE, MAGNARELLI, PAULIN, PERRY, PRETLOW,
  SCARBOROUGH, TOWNS, WEINSTEIN, 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

AN ACT to amend the general business law, in relation to debt collection
  notices

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1.   The general business law  is  amended  by  adding  a  new
section 601-a to read as follows:
  S  601-A.  DEBT  COLLECTION  NOTICE TO CONSUMERS.   1. AS USED IN THIS
SECTION, THE FOLLOWING TERM SHALL HAVE THE FOLLOWING MEANING:
  "DEBT COLLECTION AGENCY" SHALL MEAN  A  PERSON,  FIRM  OR  CORPORATION
ENGAGED  IN  BUSINESS,  THE  PRINCIPAL  PURPOSE OF WHICH IS TO REGULARLY
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.
  THE  TERM  DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDITOR
WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDITOR;
  (II) 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;

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

A                                                          LBD03055-03-9

A. 271--A                           2

  (III) ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
ANY OTHER PERSON IN CONNECTION WITH  THE  JUDICIAL  ENFORCEMENT  OF  ANY
DEBT;
  (IV) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACI-
TY  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  JUDG-
MENTS,  BUT NOT ANY ATTORNEY-AT-LAW OR LAW FIRM WHO REGULARLY ENGAGES IN
ACTIVITIES TRADITIONALLY ASSOCIATED WITH DEBT COLLECTION, INCLUDING  BUT
NOT  LIMITED  TO,  SENDING DEMAND LETTERS OR MAKING COLLECTION TELEPHONE
CALLS;
  (V) ANY PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS OF
THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
  (VI) 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;
  (VII) 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
  (VIII) 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. EACH AND EVERY DEBT COLLECTION AGENCY SHALL INCLUDE IN EACH INITIAL
CORRESPONDENCE ON A PAST DUE DEBT TO A DEBTOR A  CLEAR  AND  CONSPICUOUS
WRITTEN  STATEMENT OF AT LEAST THE FOLLOWING ITEMS, IN SUBSTANTIALLY THE
FOLLOWING FORM, TO BE CLEARLY AND CONSPICUOUSLY LABELED  "DEBTOR'S  BILL
OF RIGHTS":
                         DEBTOR'S BILL OF RIGHTS
  AS  A  DEBTOR WHO OWES OR MAY OWE A CONSUMER CLAIM, YOU ARE GIVEN SOME
PROTECTION AND RIGHTS BY THE NEW YORK  LAW  REGULATING  DEBT  COLLECTION
PROCEDURES.    YOU  SHOULD  BE  AWARE OF YOUR RIGHTS AND NOT PERMIT YOUR
RIGHTS TO BE VIOLATED.  SOME, NOT ALL, OF THE MORE IMPORTANT PROTECTIONS
ARE HIGHLIGHTED BELOW.
  1. A DEBT COLLECTOR MAY CONTACT YOU OR ANY MEMBER OF  YOUR  FAMILY  OR
HOUSEHOLD DIRECTLY. HOWEVER, THEY MAY NOT CONTACT YOU WITH SUCH FREQUEN-
CY,  AT  UNUSUAL  HOURS, OR IN A MANNER THAT CAN BE EXPECTED TO ABUSE OR
HARASS YOU. THEY ALSO CANNOT THREATEN ACTION WHICH THEY DO NOT  TAKE  IN
THE USUAL COURSE OF BUSINESS.
  2.  A DEBT COLLECTOR MAY NOT THREATEN TO CONTACT YOUR EMPLOYER REGARD-
ING A DEBT PRIOR TO OBTAINING A FINAL JUDGMENT AGAINST YOU.  HOWEVER,  A
DEBT  COLLECTOR  MAY  CONTACT YOUR EMPLOYER TO EXECUTE A WAGE ASSIGNMENT
AGREEMENT IF YOU, THE DEBTOR, HAVE AGREED TO THE ASSIGNMENT.
  3. A DEBT COLLECTOR CANNOT USE A COMMUNICATION  WHICH  APPEARS  TO  BE
AUTHORIZED,  ISSUED, OR APPROVED BY A GOVERNMENT AGENCY OR ATTORNEY WHEN
IT IS NOT.
  4. A DEBT COLLECTOR CANNOT DISCLOSE OR THREATEN TO  DISCLOSE  INFORMA-
TION  AFFECTING  YOUR  REPUTATION  FOR CREDITWORTHINESS IF THE COLLECTOR
KNOWS OR HAS REASON TO KNOW THE INFORMATION IS FALSE. A  DEBT  COLLECTOR
ALSO  CANNOT ATTEMPT OR THREATEN TO ENFORCE A RIGHT WHEN IT KNOWS OR HAS
REASON TO KNOW THE RIGHT DOES NOT EXIST.

A. 271--A                           3

  THE NOTICE REQUIRED BY THIS SUBDIVISION SHALL BE PRINTED OR WRITTEN IN
AT LEAST TEN POINT BOLD TYPE.
  S  2.  Subdivision  1  of  section 602 of the general business law, as
added by chapter 753 of the laws of 1973, is amended to read as follows:
  1. Except as otherwise provided by law, any person who [shall violate]
VIOLATES the terms OF SECTION SIX HUNDRED ONE of this article [shall be]
IS guilty of a misdemeanor, and each such violation shall  be  deemed  a
separate offense. A VIOLATION BY ANY PERSON OF SECTION SIX HUNDRED ONE-A
OF THIS ARTICLE, IF SUCH VIOLATION CONSTITUTES THE FIRST SUCH OFFENSE BY
SUCH  PERSON, IS PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED TWO HUNDRED
FIFTY DOLLARS.  THE SECOND OFFENSE AND ANY OFFENSE COMMITTED  THEREAFTER
ARE PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED FIVE HUNDRED DOLLARS.
  S  3. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

co-Sponsors

View additional co-sponsors

multi-Sponsors

View additional multi-sponsors

2009-A271B (ACTIVE) - Details

See Senate Version of this Bill:: S3797
Law Section:: General Business Law
Versions Introduced in 2011-2012 Legislative Session:: A891

2009-A271B (ACTIVE) - Summary

2009-A271B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A271B

TITLE  OF BILL:  An act to amend the general business law and the execu-
tive law, in relation to debt collection notices

PURPOSE OF GENERAL IDEA OF BILL: To provide a Debtor's Bill  of  Rights"
to  inform consumers of certain provisions of New York's debt collection
practices law.

SUMMARY OF SPECIFIC PROVISIONS: This bill would  set  forth  a  specific
notice-to  consumers, to be included in each initial correspondence on a
past due debt, of such consumer's rights under the New York law regulat-
ing debt collection practices. The notice would contain information such
as who and when a debt collector may contact a  debtor  about  the  debt
owed  as well as the fact that a debt collector cannot disclose informa-
tion affecting a consumer debtor's reputation for credit  worthiness  if
the  debt collector knows or has reasons to know that the information is
false. The bill also clarifies the notice regarding permissible  contact
with a debtor's employer (Debtor's Bill of Rights paragraph 2).

Adds  a new section 601-a to the general business law and amends section
602 of such law.

JUSTIFICATION: Debt is a fact of  many  consumer's  lives.  Some  manage
their  debt  without  a  problem  -  others do not. Consumers who cannot
manage their debt may find themselves the subjects of  debt  collection.

Faced with the inability to payoff a loan or credit card bill, consumers
are  contacted  by  creditors  as  well as professional debt collectors.
Abuses have arisen in the debt collection  area.    Creditors  and  debt
collectors  have  contacted  consumers  at work in ways that violate the
law; late at night; and through unauthorized third parties. With consum-
er debt dramatically increasing  through  the  1980's,  these  practices
proliferated.  In fact, there have been reports of debt collectors park-
ing a hearse in front of an individual's home  with  "A  deadbeat  lives
here"  written on it. These and other practices are not only outside the
law, they are outrageous and must stop.

An effective way to curb abuses of the  law  and,  provide  benefits  to
consumers  and  businesses  is  to  inform  consumers of the limitations
placed on debt collectors by New  York  Law.  Consumers  deserve  to  be
treated  fairly  and  reasonably, even when they have outstanding debts.
At the same time, business benefits from consumers paying  their  debts.
If  debts  are  not  paid,  the cost of business increases - harming the
business, competition and consumers.

PRIOR  LEGISLATIVE  HISTORY:    2007-2008:  A.221  -   Passed   Assembly
2005-2006:  A.614  -  advanced  to  Third  Reading  2003-2004:  A.3549 -
advanced to Third Reading

FISCAL IMPLICATIONS: None to. the State.

EFFECTIVE DATE: This act shall take effect on the first of January  next
succeeding the date on which it shall have become law.

2009-A271B (ACTIVE) - Bill Text download pdf

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

                                 271--B
                                                         Cal. No. 14

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by M. of A. PHEFFER, GIANARIS, CLARK, ORTIZ, MILLMAN, ROBIN-
  SON, J. RIVERA, BENJAMIN, GABRYSZAK, N. RIVERA, JAFFEE --  Multi-Spon-
  sored by -- M. of A.  ALFANO, AUBRY, BARRA, BRENNAN, COOK, CYMBROWITZ,
  DelMONTE,   ENGLEBRIGHT,  FARRELL,  GLICK,  GOTTFRIED,  HOOPER,  HOYT,
  JACOBS, LIFTON, LUPARDO, MAGEE, MAGNARELLI,  PAULIN,  PERRY,  PRETLOW,
  SCARBOROUGH, TOWNS, WEINSTEIN, 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 -- reported from  committee,  advanced  to  a  third
  reading,  amended  and  ordered  reprinted, retaining its place on the
  order of third reading

AN ACT to amend the general business  law  and  the  executive  law,  in
  relation to debt collection notices

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1.   The general business law  is  amended  by  adding  a  new
section 601-a to read as follows:
  S  601-A.  DEBT  COLLECTION  NOTICE TO CONSUMERS.   1. AS USED IN THIS
SECTION, THE FOLLOWING TERM SHALL HAVE THE FOLLOWING MEANING:
  "DEBT COLLECTION AGENCY" SHALL MEAN  A  PERSON,  FIRM  OR  CORPORATION
ENGAGED  IN  BUSINESS,  THE  PRINCIPAL  PURPOSE OF WHICH IS TO REGULARLY
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.
  THE  TERM  DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDITOR
WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDITOR;
  (II) 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                      [ ] is old law to be omitted.
                                                           LBD03055-08-0

A. 271--B                           2

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;
  (III) ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS ON
ANY  OTHER  PERSON  IN  CONNECTION  WITH THE JUDICIAL ENFORCEMENT OF ANY
DEBT;
  (IV) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACI-
TY 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 JUDG-
MENTS, BUT NOT ANY ATTORNEY-AT-LAW OR LAW FIRM WHO REGULARLY ENGAGES  IN
ACTIVITIES  TRADITIONALLY ASSOCIATED WITH DEBT COLLECTION, INCLUDING BUT
NOT LIMITED TO, SENDING DEMAND LETTERS OR  MAKING  COLLECTION  TELEPHONE
CALLS;
  (V) ANY PERSON EMPLOYED BY A UTILITY REGULATED UNDER THE PROVISIONS OF
THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
  (VI)  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;
  (VII)  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
  (VIII) 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. EACH AND EVERY DEBT COLLECTION AGENCY SHALL INCLUDE IN EACH INITIAL
CORRESPONDENCE  ON  A  PAST DUE DEBT TO A DEBTOR A CLEAR AND CONSPICUOUS
WRITTEN STATEMENT OF AT LEAST THE FOLLOWING ITEMS, IN SUBSTANTIALLY  THE
FOLLOWING  FORM,  TO BE CLEARLY AND CONSPICUOUSLY LABELED "DEBTOR'S BILL
OF RIGHTS":
                         DEBTOR'S BILL OF RIGHTS
  AS A DEBTOR WHO OWES OR MAY OWE A CONSUMER CLAIM, YOU ARE  GIVEN  SOME
PROTECTION  AND  RIGHTS BY THE NEW YORK AND FEDERAL LAWS REGULATING DEBT
COLLECTION PROCEDURES.   YOU SHOULD BE AWARE  OF  YOUR  RIGHTS  AND  NOT
PERMIT YOUR RIGHTS TO BE VIOLATED.  SOME, NOT ALL, OF THE MORE IMPORTANT
PROTECTIONS ARE HIGHLIGHTED BELOW.
  1.  A  DEBT  COLLECTOR MAY CONTACT YOU OR ANY MEMBER OF YOUR FAMILY OR
HOUSEHOLD DIRECTLY. HOWEVER, THEY MAY NOT CONTACT YOU WITH SUCH FREQUEN-
CY, AT UNUSUAL HOURS, OR IN A MANNER THAT CAN BE EXPECTED  TO  ABUSE  OR
HARASS  YOU.  THEY ALSO CANNOT THREATEN ACTION WHICH THEY DO NOT TAKE IN
THE USUAL COURSE OF BUSINESS.
  2. A DEBT COLLECTOR MAY NOT THREATEN TO CONTACT YOUR EMPLOYER  REGARD-
ING  A DEBT PRIOR TO OBTAINING A FINAL JUDGMENT AGAINST YOU.  HOWEVER, A
DEBT COLLECTOR MAY CONTACT YOUR EMPLOYER TO EXECUTE  A  WAGE  ASSIGNMENT
AGREEMENT IF YOU, THE DEBTOR, HAVE AGREED TO THE ASSIGNMENT.
  3.  A  DEBT  COLLECTOR  CANNOT USE A COMMUNICATION WHICH APPEARS TO BE
AUTHORIZED, ISSUED, OR APPROVED BY A GOVERNMENT AGENCY OR ATTORNEY  WHEN
IT IS NOT.
  4.  A  DEBT COLLECTOR CANNOT DISCLOSE OR THREATEN TO DISCLOSE INFORMA-
TION AFFECTING YOUR REPUTATION FOR  CREDITWORTHINESS  IF  THE  COLLECTOR
KNOWS  OR  HAS REASON TO KNOW THE INFORMATION IS FALSE. A DEBT COLLECTOR

A. 271--B                           3

ALSO CANNOT ATTEMPT OR THREATEN TO ENFORCE A RIGHT WHEN IT KNOWS OR  HAS
REASON TO KNOW THE RIGHT DOES NOT EXIST.
  FOR  MORE  INFORMATION  ABOUT YOUR RIGHTS UNDER STATE AND FEDERAL DEBT
COLLECTION  PROCEDURES  LAW,  CONTACT  THE  NEW  YORK   STATE   CONSUMER
PROTECTION  BOARD AT (INSERT THE CURRENT TELEPHONE NUMBER ESTABLISHED BY
THE STATE CONSUMER PROTECTION BOARD FOR RECEIVING INQUIRIES FROM CONSUM-
ERS) OR (INSERT THE CURRENT ADDRESS OF THE WEBSITE  OR  WEBPAGE  CREATED
PURSUANT  TO  PARAGRAPH  L  OF SUBDIVISION THREE OF SECTION FIVE HUNDRED
FIFTY-THREE OF THE EXECUTIVE LAW).  YOU MAY ALSO CONTACT  THE  NEW  YORK
STATE  ATTORNEY  GENERAL  AT (INSERT THE CURRENT TELEPHONE NUMBER ESTAB-
LISHED BY THE DEPARTMENT OF LAW FOR RECEIVING INQUIRIES FROM  CONSUMERS)
OR (INSERT THE CURRENT ADDRESS OF THE WEBSITE OF THE DEPARTMENT OF LAW).
  THE NOTICE REQUIRED BY THIS SUBDIVISION SHALL BE PRINTED OR WRITTEN IN
AT LEAST TEN POINT BOLD TYPE.
  S  2.  Subdivision  1  of  section 602 of the general business law, as
added by chapter 753 of the laws of 1973, is amended to read as follows:
  1. Except as otherwise provided by law, any person who [shall violate]
VIOLATES the terms OF SECTION SIX HUNDRED ONE of this article [shall be]
IS guilty of a misdemeanor, and each such violation shall  be  deemed  a
separate offense. A VIOLATION BY ANY PERSON OF SECTION SIX HUNDRED ONE-A
OF THIS ARTICLE, IF SUCH VIOLATION CONSTITUTES THE FIRST SUCH OFFENSE BY
SUCH  PERSON, IS PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED TWO HUNDRED
FIFTY DOLLARS.  THE SECOND OFFENSE AND ANY OFFENSE COMMITTED  THEREAFTER
ARE PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED FIVE HUNDRED DOLLARS.
  S  3.  Subdivision 3 of section 553 of the executive law is amended by
adding a new paragraph l to read as follows:
  L. ESTABLISH A WEBSITE OR WEBPAGE THAT INCLUDES, BUT  IS  NOT  LIMITED
TO,  INFORMATION REGARDING THE PROTECTION AND RIGHTS AFFORDED TO CONSUM-
ERS UNDER STATE AND FEDERAL LAWS REGULATING DEBT COLLECTION  PROCEDURES,
A   SAMPLE  INITIAL  DEBT  COLLECTION  DISPUTE  LETTER,  A  SAMPLE  DEBT
COLLECTION CEASE AND DESIST LETTER, AND THE CURRENT CONTACT  INFORMATION
FOR THE ATTORNEY GENERAL AND THE FEDERAL TRADE COMMISSION.
  S  4. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

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Assembly Bill A271A

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Thomas Alfano

Jeffrion Aubry

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Michael Gianaris

Barbara Clark

Felix Ortiz

Joan Millman

multi-Sponsors

Thomas Alfano

Jeffrion Aubry

Robert Barra

James F. Brennan

2009-A271B (ACTIVE) - Details

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