senate Bill S570

2013-2014 Legislative Session

Creates a private right of action for improper debt collection procedures

download bill text pdf

Sponsored By

Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

do you support this bill?

Actions

view actions (2)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to consumer protection
Jan 09, 2013 referred to consumer protection

Co-Sponsors

S570 - Bill Details

See Assembly Version of this Bill:
A6654
Current Committee:
Law Section:
General Business Law
Laws Affected:
Amd ยง602, Gen Bus L
Versions Introduced in 2011-2012 Legislative Session:
S4238A, A6674A

S570 - Bill Texts

view summary

Creates a private right of action for improper debt collection procedures; allows plaintiffs to recover punitive damages and reasonable attorneys' fees.

view sponsor memo
BILL NUMBER:S570

TITLE OF BILL:
An act
to amend the general business law, in relation to
allowing a
private right of action for improper debt collection

SUMMARY OF SPECIFIC PROVISIONS:
This bill amends section 602 of the general business law to create a
private right of action for a debtor for improper debt collection
procedures based on the following: 1. Any person who violates this
article shall be guilty of a misdemeanor, and each violation shall be
a separate offense. 2. A debtor can bring a private right of action
for violations of this article. The person shall be liable to the
debtor for any actual damages the debtor sustained as a result of the
violation of the article.

JUSTIFICATION:
This bill adds significant new protection to debtors in this state. It
expressly provides for a private right of action in debt collection
cases. Given that a private right of action was not expressly
provided for in article 29-H of the General Business Law, which
regulates debt collection practices, intermediate state courts
decided the issue with varying results. In I.F.C. PERSONAL MONEY
MANAGERS V. VADNEY, 133 Misc. 2d 841, 508 N.Y.S. 2d 845 (Sup. 1986),
and KOHLER V. FORD MOTOR CREDIT CO., 112 Misc. 2d 480, 447 N.Y.S. 2d
215, a private right of action was found where creditors employed
improper debt collection practices. However, in LANE V. MARINE
MIDLAND BANK, 112 Misc. 2d 200, 446 N.Y.S. 2d 873, the court held
that there is no private right of action in debt collection cases. A
private right of action could arguably have been brought in debt
collection actions under different provisions of the General Business
Law. However, the New York Court of Appeals in VARELA V. INVESTORS
INSURANCE HOLDING CORP., 81 N.Y. 2d 958, 598 N.Y.S. 2d 761 (1993),
definitively settled the issue. This bill overrules the VARELA
decision wherein the Court held that article 29-H of the General
Business Law, which regulates debt collection practices, does
not create a private tight of action but authorizes only the
District Attorney and the Attorney General to commence an action for
violation of its provision. The Court's rationale was based on the
Legislature's failure to expressly provide for a private right of
action in this article, while providing for such in other provisions.
Presently, debtors are being harassed by creditors through their
friends and relatives and also at their work place. Creditors are
also using scare tactics towards the children of the debtors as a
means of a collection procedure. As a result, many children become
afraid of being homeless or having their parents taken away from
them. On the other hand, some debtors are faced with losing their
jobs because they are receiving too many harassing phone calls at
their work place. Creditors continue to harass debtors by any means
necessary, because they can get away with it. This bill shall reduce
the frequency of harassment: by creditors towards debtors by
expressly creating a private right of action and imposing fines for
improper debt collection procedures.

LEGISLATIVE HISTORY:


2012: Senate Bill
423B-A (Gianaris) - Died in Senate Consumer
Protection Committee
2012: Assembly Bill
6674-A (Jeffries) - Passed Assembly 91-51
(6/20/11)

EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   570

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by Sen. GIANARIS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Consumer Protection

AN ACT to amend the general business law,  in  relation  to  allowing  a
  private right of action for improper debt collection

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

  Section 1. Section 602 of the  general  business  law  is  amended  by
adding a new subdivision 4 to read as follows:
  4. A DEBTOR SHALL HAVE A PRIVATE RIGHT OF ACTION AGAINST ANY PERSON OR
PERSONS  IN  VIOLATION  OF THIS ARTICLE. SUCH PERSON OR PERSONS SHALL BE
LIABLE TO THE DEBTOR FOR ANY ACTUAL DAMAGES THE DEBTOR  SUSTAINED  AS  A
RESULT OF THE VIOLATION OF THIS ARTICLE, ANY PUNITIVE DAMAGES AWARDED BY
THE COURT, AND REASONABLE ATTORNEY'S FEES.
  S  2.  This  act shall take effect on the thirtieth day after it shall
have become a law.






 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01835-01-3

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.