EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08826-02-1
A. 6089 2
ANY OPERATING SUBSIDIARY OF ANY SUCH BANK, TRUST COMPANY, SAVINGS BANK,
SAVINGS AND LOAN ASSOCIATION, OR CREDIT UNION.
2. "Consumer" means any natural person who is solicited to purchase or
who purchases the services of a credit services business.
3. "EXTENSION OF CREDIT" MEANS THE RIGHT TO DEFER PAYMENT OF DEBT OR
TO INCUR DEBT AND DEFER ITS PAYMENT, OFFERED OR GRANTED PRIMARILY FOR
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES.
4. "Person" includes an individual, corporation, partnership, joint
venture, or any business entity.
[4.] 5. The terms "consumer reporting agency", "consumer report",
"investigative consumer report", "file", and "adverse information" shall
have the meanings ascribed to each by section three hundred eighty-a of
this chapter.
S 3. Section 458-c of the general business law, as added by chapter
386 of the laws of 1986, is amended to read as follows:
S 458-c. Information statement; procedure. 1. Prior to the execution
of a contract between a consumer and a credit services business, the
credit services business shall provide the consumer an information
statement in writing, on a separate sheet, containing the information
required by section four hundred fifty-eight-d of this chapter. The
consumer shall acknowledge receipt of such information statement by
placing his OR HER signature on the face thereof. The credit services
business shall maintain on file [or], microfilm OR ELECTRONIC MEDIA for
a period of two years from the date of such acknowledgement an exact
copy of such information statement.
2. IN ADDITION TO THE REQUIREMENTS OF SUBDIVISION ONE OF THIS SECTION,
IN ANY ORAL COMMUNICATION DURING WHICH A CONSUMER PAYS OR AGREES TO PAY
FOR THE SERVICES OF A CREDIT SERVICES BUSINESS, BEFORE THE CONSUMER PAYS
OR AGREES TO PAY FOR SUCH SERVICES, WHICHEVER OCCURS FIRST, THE CREDIT
SERVICES BUSINESS SHALL ORALLY DISCLOSE IN A CLEAR AND CONSPICUOUS
MANNER TO THE CONSUMER THE FOLLOWING STATEMENTS OR SUBSTANTIALLY SIMILAR
STATEMENTS:
(A) YOU HAVE THE RIGHT TO OBTAIN A FREE COPY OF YOUR CREDIT REPORT
ONCE EVERY TWELVE MONTHS FROM EACH OF THE NATIONWIDE CREDIT REPORTING
AGENCIES;
(B) YOU MAY, ON YOUR OWN, DISPUTE INACCURATE INFORMATION IN YOUR CRED-
IT REPORT BY CONTACTING A CREDIT REPORTING AGENCY DIRECTLY;
(C) NEITHER YOU NOR ANY BUSINESS OR ORGANIZATION HAS THE RIGHT TO HAVE
ACCURATE, CURRENT, AND VERIFIABLE INFORMATION REMOVED FROM YOUR CREDIT
REPORT; AND
(D) YOU HAVE THE RIGHT TO CANCEL YOUR CONTRACT WITH ANY CREDIT
SERVICES BUSINESS FOR ANY REASON WITHIN FIVE BUSINESS DAYS FROM THE DATE
YOU SIGN THE CONTRACT.
S 4. Section 458-d of the general business law, as added by chapter
386 of the laws of 1986, is amended to read as follows:
S 458-d. Information statement; contents. The information statement
shall be printed in at least ten point type and shall include the
following[:
"RIGHT TO REVIEW YOUR FILE"
"The Federal Fair Credit Reporting Act gives you the right to know
what your credit file contains, and the consumer reporting agency must
provide someone to help you interpret the data. The New York Fair Credit
Reporting Act gives you the right to receive an actual copy of your
credit report. You will be required to identify yourself to the consum-
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er reporting agency and you may be charged a small fee. There is no fee,
however, if you have been turned down for credit, employment, or insur-
ance because of information contained in a report within the preceding
thirty days."
"INCORRECT INFORMATION"
"Consumer reporting agencies are required to follow reasonable proce-
dures to ensure that subscribing creditors report information accurate-
ly. However, mistakes may occur.
When you notify the consumer reporting agency in writing that you
dispute the accuracy of information, it must reinvestigate and modify or
remove inaccurate data. The consumer reporting agency may not charge any
fee for this service. Any pertinent data you have concerning an error
should be given to the consumer reporting agency.
If reinvestigation does not resolve the dispute to your satisfaction,
you may enter a statement of one hundred words or less in your file,
explaining why you think the record is inaccurate.
The consumer reporting agency must include your statement about
disputed data -- or a coded version of it -- with any reports it issues
about you. New York law also provides that, at your request, the consum-
er reporting agency must notify any person who has received a report in
the previous year that an error existed and furnish such person with the
corrected information."
"TIME LIMITS ON ADVERSE DATA"
"Most kinds of information in your file may be reported for a period
of seven years. If you have declared personal bankruptcy, however, that
fact may be reported for ten years.
After seven years or ten years, the information can't be disclosed by
a credit reporting agency unless you are being investigated for a credit
application of $50,000 or more, for an application to purchase life
insurance of $50,000 or more, or for employment at an annual salary of
$25,000 or more."] NOTICE. PARAGRAPH HEADINGS SHALL BE CAPITALIZED AND
PRINTED IN FOURTEEN POINT BOLD TYPE.
"IMPORTANT NOTICE REGARDING CREDIT SERVICES"
"YOU HAVE A RIGHT TO DISPUTE INACCURATE INFORMATION IN YOUR CREDIT
REPORT BY CONTACTING A CREDIT REPORTING AGENCY DIRECTLY. HOWEVER,
NEITHER YOU NOR ANY BUSINESS OR ORGANIZATION HAS THE RIGHT TO HAVE ACCU-
RATE, CURRENT, AND VERIFIABLE INFORMATION REMOVED FROM YOUR CREDIT
REPORT. MOST KINDS OF INFORMATION MAY BE REPORTED FOR A PERIOD OF SEVEN
YEARS. IF YOU HAVE DECLARED PERSONAL BANKRUPTCY, HOWEVER, THAT FACT MAY
BE REPORTED FOR TEN YEARS."
"RIGHT TO REVIEW YOUR CREDIT REPORT"
"YOU HAVE A RIGHT TO OBTAIN A FREE COPY OF YOUR CREDIT REPORT ONCE
EVERY TWELVE MONTHS FROM EACH OF THE NATIONWIDE CREDIT REPORTING AGEN-
CIES. TO REQUEST YOUR FREE ANNUAL CREDIT REPORT, YOU MAY GO TO
WWW.ANNUALCREDITREPORT.COM, OR CALL 877-322-8228, OR COMPLETE THE ANNUAL
CREDIT REPORT REQUEST FORM AND MAIL IT TO: ANNUAL CREDIT REPORT REQUEST
SERVICE, P.O. BOX 105281, ATLANTA, GA 30348-5281. YOU CAN OBTAIN ADDI-
TIONAL COPIES OF YOUR CREDIT REPORT FROM A CREDIT REPORTING AGENCY, FOR
WHICH YOU MAY BE CHARGED A REASONABLE FEE. THERE IS NO FEE, HOWEVER, IF
YOU HAVE BEEN TURNED DOWN FOR CREDIT, EMPLOYMENT, INSURANCE, OR A RENTAL
DWELLING BECAUSE OF INFORMATION IN YOUR CREDIT REPORT WITHIN THE PRECED-
ING SIXTY DAYS. THE CREDIT REPORTING AGENCY MUST PROVIDE SOMEONE TO HELP
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YOU INTERPRET THE INFORMATION IN YOUR CREDIT FILE. YOU ARE ENTITLED TO
RECEIVE A FREE COPY OF YOUR CREDIT REPORT IF YOU ARE UNEMPLOYED AND
INTEND TO APPLY FOR EMPLOYMENT IN THE NEXT SIXTY DAYS, IF YOU ARE A
RECIPIENT OF PUBLIC WELFARE ASSISTANCE, OR IF YOU HAVE REASON TO BELIEVE
THAT THERE IS INACCURATE INFORMATION IN YOUR CREDIT REPORT DUE TO FRAUD.
"INCORRECT INFORMATION"
"CREDIT REPORTING AGENCIES ARE REQUIRED TO FOLLOW REASONABLE PROCE-
DURES TO ENSURE THAT THE INFORMATION THEY REPORT IS ACCURATE. HOWEVER,
MISTAKES MAY OCCUR."
"YOU MAY, ON YOUR OWN, NOTIFY A CREDIT REPORTING AGENCY IN WRITING
THAT YOU DISPUTE THE ACCURACY OF INFORMATION IN YOUR CREDIT FILE. THE
CREDIT REPORTING AGENCY MUST THEN REINVESTIGATE AND MODIFY OR REMOVE
INACCURATE OR INCOMPLETE INFORMATION. THE CREDIT REPORTING AGENCY MAY
NOT CHARGE ANY FEE FOR THIS SERVICE. ANY PERTINENT INFORMATION AND
COPIES OF ALL DOCUMENTS YOU HAVE CONCERNING AN ERROR SHOULD BE GIVEN TO
THE CREDIT REPORTING AGENCY."
"IF THE CREDIT REPORTING AGENCY'S REINVESTIGATION DOES NOT RESOLVE THE
DISPUTE TO YOUR SATISFACTION, YOU MAY SEND A BRIEF STATEMENT TO THE
CREDIT REPORTING AGENCY, TO BE KEPT IN YOUR REPORT, EXPLAINING WHY YOU
THINK THE RECORD IS INACCURATE. THE CREDIT REPORTING AGENCY MUST INCLUDE
A SUMMARY OF YOUR STATEMENT ABOUT DISPUTED INFORMATION WITH ANY REPORT
IT ISSUES ABOUT YOU."
"YOUR RIGHTS REGARDING CREDIT SERVICES BUSINESSES"
"YOU HAVE THE RIGHT TO CANCEL YOUR CONTRACT WITH ANY CREDIT SERVICES
BUSINESS FOR ANY REASON WITHIN FIVE BUSINESS DAYS FROM THE DATE YOU
SIGNED IT."
"YOU HAVE A RIGHT TO SUE A CREDIT SERVICES BUSINESS THAT MISLEADS YOU
OR VIOLATES NEW YORK STATE OR FEDERAL LAWS THAT PROHIBIT DECEPTIVE PRAC-
TICES."
"THE FEDERAL TRADE COMMISSION AND THE NEW YORK ATTORNEY GENERAL REGU-
LATE CREDIT REPORTING AGENCIES AND CREDIT SERVICES BUSINESSES. FOR MORE
INFORMATION, CONTACT THE FEDERAL TRADE COMMISSION AT (INSERT THE CURRENT
TELEPHONE NUMBER ESTABLISHED BY THE FEDERAL TRADE COMMISSION FOR RECEIV-
ING INQUIRIES FROM CONSUMERS) OR (INSERT THE CURRENT ADDRESS OF THE
WEBSITE OF THE FEDERAL TRADE COMMISSION). YOU MAY ALSO CONTACT THE NEW
YORK 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)."
S 5. Section 458-e of the general business law, as added by chapter
386 of the laws of 1986, is amended to read as follows:
S 458-e. Advance fees prohibited. It is hereby declared to be an
unfair and deceptive trade practice and unlawful for a credit services
business to: 1. receive or collect from a consumer any fee OR OTHER
VALUABLE CONSIDERATION in advance of the performance of those services
specified in the contract as required by section four hundred fifty-
eight-f of this chapter; OR
2. FAIL TO PERFORM THE AGREED SERVICES WITHIN SIX MONTHS FOLLOWING THE
DATE THE CONSUMER SIGNS THE CONTRACT FOR THOSE SERVICES.
S 6. Section 458-f of the general business law, as added by chapter
386 of the laws of 1986, is amended to read as follows:
S 458-f. Contracts; requirements and contents. 1. Every contract
between a consumer and a credit services business shall be in writing,
shall be dated, shall contain the street address of the credit services
business and the consumer, and shall be signed by the consumer and cred-
it services business. Each contract shall contain the following:
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(a) A complete and detailed statement of the services to be performed
and the results to be achieved by the credit services business for or on
behalf of the consumer, including a list of the adverse information
appearing on the consumer's credit report that will be modified, a
description of the precise nature of each modification, and the esti-
mated date by which each modification will occur. A copy of the consum-
er's current credit report issued by a consumer credit reporting agency
shall be annexed to the contract with the adverse entries proposed to be
modified clearly marked.
(b) A statement in at least ten point type as follows:
"Under New York law no fee may be collected in advance of performance
of the services specified in this contract."
2. The contract shall be accompanied by a completed form in duplicate,
captioned "Notice of Cancellation," which shall be attached to the
contract and easily detachable, and which shall contain in at least
[ten] TWELVE point type the following:
"Notice of Cancellation"
"You may cancel this contract, without any penalty or obligation,
within [three] FIVE days from the date the contract is signed.
"To cancel this contract, mail or deliver a signed and dated copy of
this cancellation notice, or any other written notice,
to ____________________ at
(name of seller)
______________________________________________________________________
(address of seller) (Place of business)
not later than midnight____________________.
(date)
"I hereby cancel this transaction."
________________________________________________
(purchaser's signature)
________________________________________________
(date)
3. A copy of the fully completed contract and all other documents
shall be given to the [buyer] CONSUMER at the time the contract is
signed.
4. ANY CONSUMER SHALL HAVE THE RIGHT TO CANCEL A CONTRACT WITH A CRED-
IT SERVICES BUSINESS WITHOUT PENALTY OR OBLIGATION BY NOTIFYING THE
CREDIT SERVICES BUSINESS OF THE CONSUMER'S INTENTION TO DO SO AT ANY
TIME BEFORE MIDNIGHT OF THE FIFTH BUSINESS DAY WHICH BEGINS AFTER THE
DATE ON WHICH THE CONTRACT OR AGREEMENT BETWEEN THE CONSUMER AND THE
CREDIT SERVICES BUSINESS IS EXECUTED OR WOULD, BUT FOR THIS SECTION,
BECOME ENFORCEABLE AGAINST THE PARTIES.
5. NO SERVICES MAY BE PROVIDED UNDER THE CONTRACT BEFORE THE END OF
THE FIVE BUSINESS DAYS BEGINNING ON THE DATE THE CONTRACT IS SIGNED.
S 7. Section 458-h of the general business law, as added by chapter
386 of the laws of 1986, subdivision 3 as added by chapter 725 of the
laws of 1991, is amended to read as follows:
S 458-h. Deceptive acts prohibited. It is hereby declared to be an
unfair and deceptive trade practice and unlawful for a credit services
[company] BUSINESS to:
1. Misrepresent directly or indirectly in its advertising, promotional
materials, sales presentation, or in any manner: the nature of the
services to be performed; the time within which services will be
performed; the ability to improve a consumer's credit report or credit
rating; the amount or type of credit a consumer can expect to receive as
A. 6089 6
a result of the performance of the services offered; the qualifications,
training or experience of its personnel.
2. Make or counsel or advise any consumer to make any statement which
is untrue or misleading and which is known, or which by the exercise of
reasonable care should be known, to be untrue or misleading, to a
consumer credit reporting agency or to any person who has extended cred-
it to a consumer or to whom a consumer is applying for an extension of
credit, with respect to a consumer's credit worthiness, credit standing,
or credit capacity.
3. Represent directly or indirectly in its advertising, promotional
materials, sales presentation, or in any manner that it can procure or
obtain a credit card for a consumer unless that credit services [compa-
ny] BUSINESS has authority to issue the credit card being advertised.
4. CHARGE OR RECEIVE ANY MONEY OR OTHER VALUABLE CONSIDERATION FOR
REFERRAL OF THE CONSUMER TO A RETAIL SELLER OR OTHER CREDIT GRANTOR WHO
WILL OR MAY EXTEND CREDIT TO THE CONSUMER, IF EITHER OF THE FOLLOWING
APPLIES:
(A) THE CREDIT THAT IS OR WILL BE EXTENDED TO THE CONSUMER (I) IS UPON
SUBSTANTIALLY THE SAME TERMS AS THOSE AVAILABLE TO THE GENERAL PUBLIC OR
(II) IS UPON SUBSTANTIALLY THE SAME TERMS THAT WOULD HAVE BEEN EXTENDED
TO THE CONSUMER WITHOUT THE ASSISTANCE OF THE CREDIT SERVICES BUSINESS.
(B) THE MONEY OR CONSIDERATION IS PAID BY THE CREDIT GRANTOR OR IS
DERIVED FROM THE CONSUMER'S PAYMENTS TO THE CREDIT GRANTOR FOR COSTS,
FEES, FINANCE CHARGES, OR PRINCIPAL.
5. MAKE, OR COUNSEL OR ADVISE A CONSUMER TO MAKE, A STATEMENT THAT IS
UNTRUE OR MISLEADING AND THAT IS KNOWN, OR THAT BY THE EXERCISE OF
REASONABLE CARE SHOULD BE KNOWN, TO BE UNTRUE OR MISLEADING, TO A CREDIT
REPORTING AGENCY OR TO A PERSON WHO HAS EXTENDED CREDIT TO A CONSUMER OR
TO WHOM A CONSUMER IS APPLYING FOR AN EXTENSION OF CREDIT, SUCH AS
STATEMENTS CONCERNING A CONSUMER'S IDENTIFICATION, HOME ADDRESS, CREDIT-
WORTHINESS, CREDIT STANDING, OR CREDIT CAPACITY.
6. REMOVE, OR ASSIST OR ADVISE THE CONSUMER TO REMOVE, ADVERSE INFOR-
MATION FROM THE CONSUMER'S CREDIT RECORD WHICH IS ACCURATE AND NOT OBSO-
LETE.
7. CREATE, OR ASSIST OR ADVISE THE CONSUMER TO CREATE, A NEW CREDIT
RECORD BY USING A DIFFERENT NAME, ADDRESS, SOCIAL SECURITY NUMBER, OR
EMPLOYEE IDENTIFICATION NUMBER.
8. FAIL TO MAINTAIN AN AGENT FOR SERVICE OF A PROCESS IN THIS STATE.
9. SUBMIT A CONSUMER'S DISPUTE TO A CONSUMER CREDIT REPORTING AGENCY
WITHOUT THE CONSUMER'S KNOWLEDGE.
10. USE A CONSUMER CREDIT REPORTING AGENCY'S TELEPHONE SYSTEM OR
TOLL-FREE TELEPHONE NUMBER TO REPRESENT THE CALLER AS THE CONSUMER IN
SUBMITTING A DISPUTE OF A CONSUMER OR REQUESTING DISCLOSURE WITHOUT
PRIOR AUTHORIZATION OF THE CONSUMER.
11. DIRECTLY OR INDIRECTLY EXTEND CREDIT TO A CONSUMER.
12. REFER A CONSUMER TO A CREDIT GRANTOR THAT IS RELATED TO THE CREDIT
SERVICES BUSINESS BY A COMMON OWNERSHIP, MANAGEMENT, OR CONTROL, INCLUD-
ING A COMMON OWNER, DIRECTOR, OR OFFICER.
13. REFER A CONSUMER TO A CREDIT GRANTOR FOR WHICH THE CREDIT SERVICES
BUSINESS PROVIDES, OR ARRANGES FOR A THIRD PARTY TO PROVIDE, SERVICES
RELATED TO THE EXTENSION OF CREDIT SUCH AS UNDERWRITING, BILLING,
PAYMENT PROCESSING, OR DEBT COLLECTION.
14. PROVIDE A CREDIT GRANTOR WITH AN ASSURANCE THAT A PORTION OF AN
EXTENSION OF CREDIT TO A CONSUMER REFERRED BY THE CREDIT SERVICES BUSI-
NESS WILL BE REPAID, INCLUDING PROVIDING A GUARANTY, LETTER OF CREDIT,
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OR AGREEMENT TO ACQUIRE A PART OF THE CREDIT GRANTOR'S FINANCIAL INTER-
EST IN THE EXTENSION OF CREDIT.
15. USE A SCHEME, DEVICE, OR CONTRIVANCE TO EVADE THE PROHIBITIONS
CONTAINED IN THIS ARTICLE.
S 8. Section 458-i of the general business law, as added by chapter
386 of the laws of 1986, is amended to read as follows:
S [458-i.] 458-J. Action for recovery of damages by consumer. Any
consumer injured by a violation of this article or by the breach by the
credit services business of a contract which has been entered into
pursuant to section four hundred fifty-eight-f of this chapter may bring
an action for recovery of damages. Judgment shall be entered in favor of
a consumer in an amount not to exceed three times the actual damages,
but in no case less than the amount paid by the [buyer] CONSUMER to the
credit services business. The court may award reasonable attorney's fees
to a prevailing plaintiff.
S 9. Section 458-k of the general business law is renumbered 458-m and
section 458-j of the general business law, as added by chapter 386 of
the laws of 1986, is amended to read as follows:
S [458-j.] 458-K. Enforcement by attorney general. In addition to the
other remedies provided, whenever there shall be a violation of this
article, 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 and restrain the
continuance of such violations; and if it shall appear to the satisfac-
tion of the court or justice that the defendant has, in fact, violated
this article, 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 arti-
cle has occurred, the court may impose a civil penalty of not more than
[one] TWO thousand FIVE HUNDRED dollars for each violation. In
connection with any such proposed application, 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.
S 10. The general business law is amended by adding two new sections
458-j and 458-l to read as follows:
S 458-J. ASSISTING AND FACILITATING. IT IS HEREBY DECLARED TO BE
UNLAWFUL FOR A PERSON TO PROVIDE SUBSTANTIAL ASSISTANCE OR SUPPORT TO
ANY CREDIT SERVICES BUSINESS WHEN THAT PERSON KNOWS OR CONSCIOUSLY
AVOIDS KNOWING THAT THE CREDIT SERVICES BUSINESS IS ENGAGED IN ANY ACT
OR PRACTICE THAT VIOLATES THIS ARTICLE.
S 458-L. SUBSEQUENT VIOLATIONS. A SECOND OR SUBSEQUENT VIOLATION OF
SECTIONS FOUR HUNDRED FIFTY-EIGHT-E OR FOUR HUNDRED FIFTY-EIGHT-H OF
THIS ARTICLE SHALL BE A CLASS A MISDEMEANOR. EACH SUCH VIOLATION MAY BE
PROSECUTED BY THE ATTORNEY GENERAL OR THE DISTRICT ATTORNEY IN THE COUN-
TY IN WHICH THE VIOLATION IS ALLEGED TO HAVE OCCURRED.
S 11. This act shall take effect on the ninetieth day after it shall
have become a law; provided, however that effective immediately, the
addition, amendment and/or repeal of any rule or regulation necessary
for the implementation of this act on its effective date are authorized
and directed to be made and completed on or before such effective date.