Relates to distressed property consultants advertisements.
Ayes (57): Adams, Addabbo, Alesi, Aubertine, Bonacic, Breslin, Diaz, Dilan, Duane, Espada, Farley, Foley, Fuschillo, Griffo, Hannon, Hassell-Thomps, Huntley, Johnson C, Johnson O, Klein, Krueger, Kruger, Larkin, LaValle, Leibell, Libous, Little, Marcellino, Maziarz, McDonald, Montgomery, Nozzolio, Onorato, Oppenheimer, Padavan, Parker, Peralta, Perkins, Ranzenhofer, Robach, Saland, Sampson, Savino, Schneiderman, Serrano, Seward, Skelos, Smith, Squadron, Stachowski, Stavisky, Stewart-Cousins, Thompson, Valesky, Volker, Winner, Young
Nays (4): DeFrancisco, Flanagan, Golden, Lanza
Excused (1): Morahan
TITLE OF BILL:
An act to amend the real property law, in relation to distressed property consultants advertisements
This bill requires that distressed property consultants provide information about the availability of free state-funded services in their advertisements.
SUMMARY OF PROVISIONS:
Section 1: Adds a new subdivision 3-a to Real Property Law section 265-b to provide that any advertisements, be they in print media or electronic media, for the services of a distressed property consultant must include a statement that such services are available and can be provided for free from certified Housing Counselors. Further that a listing of such counselors is available from the NYS Banking Department.
This bill requires that all companies that offer distressed property consulting services as defined by law, must include a statement that alerts consumers that the services that they provide can often be provided for free through housing counselors funded by New York State and that they should consult an attorney before signing such a contract. It also requires that these companies must provide the number of the New York State Banking Department as part of the consumer disclosure statement.
With the onset of the subprime lending crisis and the resulting economic crisis, the nationwide jump in foreclosures and mortgage defaults has triggered a corresponding rise in the number of predatory scams targeting financially-strapped homeowners. The federal government recently announced a crackdown on loan modification and foreclosure rescue scams. Further, the FBI is currently targeting more than 2,000 companies for allegedly scamming troubled homeowners with "rescue" offers -- up 400% from five years ago. Also, a recent Federal Trade Commission (FTC) investigation of nationwide online and print ads offering mortgage foreclosure rescue assistance found that about 70 separate companies were running questionable ads.
In the spring of 2009, Attorney General Andrew Cuomo announced that his office was conducting a statewide investigation into the loan modification industry. Subpoenas were filed against twelve companies that offer these services to consumers across New York. According to the Attorney General's investigation, many of these companies lured consumers through false and misleading tactics, such as using company names and advertisements that give the false impression that they are affiliated with a government agency. Further, such advertisements
falsely claim to have extraordinarily high success rates - of as much as 100 percent, and falsely claimed to have a special relationship with the homeowner's lender.
Capitalizing on the current economic downturn and housing crisis, these companies often scour foreclosure notices and filings and prey on consumers desperate to save their homes from being foreclosed. Their solicitations may be in person, by mail, telephone or e-mail, or via advertisements. Often, these scammers use titles that sound official, such as "foreclosure or mortgage consultant" or falsely market themselves as a "foreclosure service" or "foreclosure rescue company."
By requiring a consumer warning statement in all distressed property consultant advertisements with the phone number of the New York State Banking Department as well as a reminder that New York State provides free counseling services, this legislation will reduce the number of distressed New York State homeowners who compound their financial difficulties by falling victim to the misleading advertisements of distressed property consulting companies.
The amendment from the "C" Print to "D" Print was a minor revision of the disclosure statement contained in subdivision (3-a) (a) of this bill.
On the sixtieth day after becoming law.
STATE OF NEW YORK ________________________________________________________________________ 5896--D Cal. No. 378 2009-2010 Regular Sessions IN SENATE June 18, 2009 ___________Introduced by Sens. KLEIN, C. JOHNSON, KRUEGER, MONTGOMERY, ONORATO, SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee -- recommitted to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee and committed to the Committee on Codes -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, passed by Senate and delivered to the Assembly, recalled, vote reconsidered, restored to third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the real property law, in relation to distressed proper- ty consultants advertisements THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 265-b of the real property law is amended by adding a new subdivision 3-a to read as follows: 3-A. DISTRESSED PROPERTY CONSULTANT ADVERTISEMENTS. (A) ALL ADVERTISE- MENTS DISSEMINATED BY A DISTRESSED PROPERTY CONSULTANT MUST PROMINENTLY INCLUDE THE FOLLOWING STATEMENT: "IN NEW YORK STATE, HOUSING COUNSELORS, WHO ARE APPROVED BY THE U.S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT OR THE NEW YORK STATE BANKING DEPARTMENT, MAY PROVIDE THE SAME OR SIMI- LAR SERVICES AS A DISTRESSED PROPERTY CONSULTANT FOR FREE. A LIST OF APPROVED HOUSING COUNSELORS CAN BE FOUND ON THE NEW YORK STATE BANKING DEPARTMENT WEBSITE AT WWW.BANKING.STATE.NY.US OR BY CONTACTING THE NEW YORK STATE BANKING DEPARTMENT TOLL-FREE AT 1-877-BANK-NYS (1-877-226-5697). YOU SHOULD CONSIDER CONSULTING AN ATTORNEY OR A GOVERNMENT-APPROVED HOUSING COUNSELOR BEFORE SIGNING ANY LEGAL DOCUMENTEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14323-09-0 S. 5896--D 2
CONCERNING A DISTRESSED PROPERTY CONSULTANT." SUCH STATEMENT, IF DISSEMINATED BY PRINT MEDIA OR THE INTERNET, SHALL BE CLEARLY AND LEGI- BLY PRINTED OR DISPLAYED IN NOT LESS THAN TWELVE-POINT BOLD TYPE, OR, IF THE ADVERTISEMENT IS PRINTED TO BE DISPLAYED IN PRINT THAT IS SMALLER THAN TWELVE POINT, IN BOLD TYPE PRINT THAT IS NO SMALLER THAN THE PRINT IN WHICH THE TEXT OF THE ADVERTISEMENT IS PRINTED OR DISPLAYED. (B) FOR THE PURPOSES OF THIS SUBDIVISION, THE TERM "ADVERTISEMENT" SHALL INCLUDE, BUT IS NOT LIMITED TO, ALL FORMS OF MARKETING, SOLICITA- TION, OR DISSEMINATION OF INFORMATION RELATED, DIRECTLY OR INDIRECTLY, TO SECURING OR OBTAINING A CONSULTING CONTRACT OR SERVICES. FURTHER, IT SHALL INCLUDE ANY AND ALL COMMONLY RECOGNIZED FORMS OF MEDIA MARKETING VIA TELEVISION, RADIO, PRINT MEDIA, ALL FORMS OF ELECTRONIC COMMUNI- CATION VIA THE INTERNET, AND ALL PREPARED SALES PRESENTATIONS GIVEN IN PERSON OR OVER THE INTERNET TO THE GENERAL PUBLIC. (C) THE ADVERTISING PROVISIONS OF THIS SUBDIVISION SHALL APPLY TO ALL DISTRESSED PROPERTY CONSULTANTS WHO DISSEMINATE ADVERTISEMENTS IN THE STATE OF NEW YORK OR WHO INTEND TO DIRECTLY OR INDIRECTLY CONTACT A HOMEOWNER WHO HAS PROPERTY LOCATED IN NEW YORK STATE. DISTRESSED PROPER- TY CONSULTANTS SHALL ESTABLISH AND AT ALL TIMES MAINTAIN CONTROL OVER THE CONTENT, FORM AND METHOD OF DISSEMINATION OF ALL ADVERTISEMENTS OF ITS SERVICES. FURTHER, ALL ADVERTISEMENTS SHALL BE SUFFICIENTLY COMPLETE AND CLEAR TO AVOID THE POSSIBILITY OF DECEPTION OR THE ABILITY TO MISLEAD OR DECEIVE. S 2. This act shall take effect on the sixtieth day after it shall have become a law.