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STATE OF NEW YORK
________________________________________________________________________

8383--B

2011-2012 Regular Sessions

IN ASSEMBLY

June 15, 2011
___________

Introduced  by  M.  of  A.  DINOWITZ,  CLARK,  ORTIZ, MILLMAN, ROBINSON,
  J. RIVERA, GABRYSZAK, N. RIVERA, JAFFEE -- Multi-Sponsored by -- M. of
  A. AUBRY, BRENNAN,  COOK,  CYMBROWITZ,  ENGLEBRIGHT,  FARRELL,  GLICK,
  GOTTFRIED, HOOPER, JACOBS, LIFTON, LUPARDO, MAGEE, MAGNARELLI, PAULIN,
  PERRY,  PRETLOW,  SCARBOROUGH,  WEINSTEIN, WEISENBERG -- read once and
  referred to the Committee on Consumer Affairs and Protection -- recom-
  mitted to the Committee on Consumer Affairs and Protection in  accord-
  ance  with  Assembly  Rule  3,  sec.  2  -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee  --  reported  and referred to the Committee on Codes -- committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

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

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

  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.
                                                           LBD13111-04-2
A. 8383--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, IN SUBSTANTIALLY THE FOLLOWING FORM,  TO  BE  CLEARLY
AND CONSPICUOUSLY LABELED "CONSUMER RIGHTS":
                             CONSUMER RIGHTS
  AS  A  CONSUMER  WHO  OWES  OR  MAY OWE A CONSUMER DEBT, YOU ARE GIVEN
CERTAIN PROTECTIONS AND RIGHTS BY NEW YORK AND FEDERAL  LAWS  REGULATING
DEBT  COLLECTION  PROCEDURES.  YOU  SHOULD  BE  AWARE OF YOUR RIGHTS AND
SHOULD NOT PERMIT YOUR RIGHTS TO BE  VIOLATED.    FOR  MORE  INFORMATION
ABOUT  YOUR  RIGHTS  UNDER  STATE AND FEDERAL DEBT COLLECTION PROCEDURES
LAW, CONTACT THE NEW YORK STATE  DEPARTMENT  OF  FINANCIAL  SERVICES  AT
(INSERT  THE  CURRENT  TELEPHONE NUMBER ESTABLISHED BY THE DEPARTMENT OF
FINANCIAL SERVICES FOR RECEIVING INQUIRIES FROM  CONSUMERS)  OR  (INSERT
THE  CURRENT ADDRESS OF THE WEBSITE OR WEBPAGE CREATED PURSUANT TO PARA-
GRAPH EIGHT OF SUBDIVISION (C) OF  SECTION  THREE  HUNDRED  ONE  OF  THE
FINANCIAL SERVICES LAW).  YOU MAY ALSO CONTACT THE NEW YORK STATE ATTOR-
NEY  GENERAL  AT (INSERT THE CURRENT TELEPHONE NUMBER ESTABLISHED 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]
A. 8383--B                          3

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. Paragraphs 6 and 7 of subsection (c) of section 301 of the finan-
cial  services law, as added by section 1 of part A of chapter 62 of the
laws of 2011, are amended and a new paragraph 8  is  added  to  read  as
follows:
  (6)  providing  technical assistance to local governments and not-for-
profits in the development of consumer protection measures with  respect
to financial products and services; [and]
  (7)   continuing   and  expanding  the  detection,  investigation  and
prevention of insurance fraud[.]; AND
  (8) ESTABLISHING A WEBSITE OR WEBPAGE THAT INCLUDES, BUT IS NOT LIMIT-
ED TO, INFORMATION REGARDING  THE  PROTECTION  AND  RIGHTS  AFFORDED  TO
CONSUMERS UNDER STATE AND FEDERAL LAWS REGULATING DEBT COLLECTION PROCE-
DURES,  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 CONSUMER FINANCIAL PROTECTION
BUREAU.
  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.