Enacts the "consumer credit fairness act"; establishes a 3 year statute of limitations for commencement of a cause of action arising out of a consumer credit transaction where the defendant is a purchaser, borrower or debtor; establishes a notice of lawsuit which must be mailed to the defendant in such a cause of action; establishes certain requirements for the complaint in such an action; provides for arbitration of such actions; 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.
TITLE OF BILL: An act to amend the civil practice law and rules, in relation to consumer credit transactions; and to amend the general business law and the executive law, in relation to debt collection notices
PURPOSE OF THE BILL: This bill creates the "Consumer Credit Fairness Act" which strengthens consumer protections in consumer debt collection proceedings and provides for a "Debtor's Bill of Rights" to inform consumers of certain provisions of New York's debt collection practices law.
SUMMARY OF PROVISIONS OF BILL: The bill would require that the complaint in consumer credit actions provide the name of the original creditor, the last four digits of the original account number, the date and amount of the last payment, a chain of title of the account, and a breakdown of the amount that the plaintiff seeks to collect. The bill also requires that a copy of the contract be attached to the complaint.
The bill would reduce the statute of limitations on consumer credit actions from six years to three years. The bill would also bar debt collectors from collecting debts on which the statute of limitations has expired.
It would require that an additional notice of a pending consumer credit action be mailed to the defendant by the clerk of the court. This is required in New York City and the bill would adopt this requirement statewide.
The bill would permit defendants in consumer credit actions to raise improper service as a defense in their answer and preserve that defense for trial without having to file a separate motion to dismiss within 60 days as under current law.
To prevent the entry of default judgments on claims which have no merit, the bill would require applications for default judgments in consumer credit actions to include specific pleading requirements. These include an affidavit by the original creditor of the facts constituting the debt, the default in payment, the sale or assignment of the debt, and the amount due at the time of sale or assignment; (ii) for each subsequent assignment or sale of the debt to another entity, an affidavit of sale of the debt by the debt seller, completed by the seller or assignor; and (iii) an affidavit of a witness of the plaintiff, which includes a chain of title of the debt, completed by the plaintiff or plaintiffs witness. The bill will also require that applications for default judgments in consumer credit actions to include a statement that after reasonable inquiry, the creditor has reason to believe that the statute of limitations has not expired.
Additionally, the bill would create a "Debtor's Bill of Rights," setting 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 debt collector
may contact a debtor about the debt owed as well as the fact that a debt collector cannot disclose information affecting a consumer debtor's reputation for creditworthiness 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). Such notice will also be required to contain contact information for the New York State Consumer Protection Board and the Attorney General's Office.
JUSTIFICATION: The average New Yorker is nearly $50,000 in debt. Even if you exclude mortgages from the equation, we owe more than $15,000 per capita for things like credit card bills, car payments and student loans. There have been countless stories in recent years drawing attention to the hopeless situation debtors can face in this economic climate, particularly those who are out of work and deep in debt. Worse yet, New Yorkers in debt are not subject simply to the inherent struggles of finding themselves financially underwater, they must also contend with abusive and underhanded debt collection practices every step of the way.
At the initial, non-litigation collection stage, consumers are regularly subjected to illegal harassment by unscrupulous debt collection agencies. The scope of debt collection horror stories is boundless: late night or harassingly frequent phone calls, threats concerning employment consequences or jail time, intimations of physical violence, vile language and racial epithets; there seems to be no depth to which some collection agencies will not stoop. New York law already forbids these practices, but the average consumer in debt generally has no idea that his legal rights are being violated.
When the collection moves to the legal phase, collection agencies regularly file lawsuits designed to exploit current gaps in our state's civil procedure laws and rules. These legal tactics usually involve unnecessary and prejudicial delays and purposefully insufficient notice, which may lead unwitting consumers to waive valid defenses and cause them to have default judgments entered against them.
This legislation is designed to combat abusive debt collection practices at both stages.
In order to combat abusive practices that occur pre-litigation this bill will create a "Debtor's Bill of Rights" which debt collection agencies must send to debtors with their initial past-due notice. The Bill of Rights will inform consumers as to several common and unlawful debt collection practices to which they may not be subjected. The Bill of Rights will also direct consumers to the appropriate agencies for further information and enforcement. Closing this information gap will deter collection agencies from engaging in abusive practices and help consumers protect themselves.
At the litigation stage, this legislation will protect consumers by reducing the statute of limitations for consumer credit actions from six to three years. At least ten states have already reduced their statutes of limitations to three years or less. The public purpose for this action is to require creditors to reduce their claims to judgment
while memories are fresh and records are still available. The bill would also extinguish the right to collect the debt after the statute of limitation has expired. This is a reaction to the now common practice of selling time-barred debt. States with similar requirements include Wisconsin and Mississippi.
This bill also adopts statewide the additional notice requirements which are already in place in New York City to ensure that more New Yorkers receive actual notice of debt collection actions. It will require court papers to include basic information about the debt to ensure that New Yorkers will be better able to identify the debt or account on which they are being sued. This notice requirement will be sent in both English and Spanish.
To ensure that default judgment applications in debt collection lawsuits are evaluated on the merits, this legislation will require proof of the complaint's allegations to be submitted as part of the application for a default judgment to protect New Yorkers against default judgments on debts for which the plaintiff does not possess the requisite proof.
The proposed legislation will protect defendants from unknowingly waiving the legitimate defense that a debt is past the statute of limitations or that they were improperly served. The public purpose for preventing the waiver is that debt collection actions are rife with poor service and default judgments which were obtained after the statute of limitations had expired. To address the latter problem, the bill will require that applications for default judgments in consumer credit actions include a statement that the creditor has reason to believe that the statute of limitations has not expired.
While there is no neat legislative solution to the consumer debt crisis, it is imperative that we ensure fairness in the debt collection process and curb the unlawful harassment to which so many New Yorkers are now subjected.
LEGISLATIVE HISTORY: 2009: S.4398-A Referred to Codes
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None noted.
EFFECTIVE DATE: January 1, after becoming law. Section three of the bill, which shortens the statute of limitations, will take effect 180 days after becoming law.
STATE OF NEW YORK ________________________________________________________________________ 677--B 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 2011 ___________Introduced by Sen. PERALTA -- read twice and ordered printed, and when printed to be committed to the Committee on Codes -- committee discharged and said bill committed to the Committee on Judiciary -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Judi- ciary in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the civil practice law and rules, in relation to consum- er credit transactions; and 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. Short title. This act shall be known and may be cited as the "consumer credit fairness act". S 2. Subdivision 2 of section 213 of the civil practice law and rules, as amended by chapter 709 of the laws of 1988, is amended to read as follows: 2. an action upon a contractual obligation or liability, express or implied, except as provided in section two hundred thirteen-a OR TWO HUNDRED FOURTEEN-F of this article or article 2 of the uniform commer- cial code or article 36-B of the general business law; S 3. The civil practice law and rules is amended by adding a new section 214-f to read as follows: S 214-F. CERTAIN ACTIONS ARISING OUT OF CONSUMER CREDIT TRANSACTIONS TO BE COMMENCED WITHIN THREE YEARS. AN ACTION ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A DEFENDANT MUST BE COMMENCED WITHIN THREE YEARS, EXCEPT AS PROVIDED IN SECTION TWO HUNDRED THIRTEEN-A OF THIS ARTICLE OR ARTICLE 2 OF THE UNIFORM COMMER- CIAL CODE OR ARTICLE 36-B OF THE GENERAL BUSINESS LAW. WHEN THE PERIOD WITHIN WHICH AN ACTION MAY BE COMMENCED UNDER THIS SECTION HAS EXPIRED, THE RIGHT TO COLLECT CONSUMER CREDIT DEBT IS EXTINGUISHED AS WELL AS THE REMEDY.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01288-07-2 S. 677--B 2
FOR PURPOSES OF THIS SECTION, "THE RIGHT TO COLLECT CONSUMER CREDIT DEBT" SHALL MEAN ANY ATTEMPTS BY THE CREDITOR, THIRD PARTY PURCHASER, OR OTHER AUTHORIZED THIRD PARTY TO COLLECT SUCH DEBT INCLUDING, BUT NOT LIMITED TO, CALLS, MAIL OR OTHER ATTEMPTS TO COLLECT. S 4. The civil practice law and rules is amended by adding a new section 306-d to read as follows: S 306-D. ADDITIONAL MAILING OF NOTICE IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRANSACTION. 1. AT THE TIME OF FILING WITH THE CLERK OF THE PROOF OF SERVICE OF THE SUMMONS AND COMPLAINT IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRANSACTION, THE PLAINTIFF SHALL SUBMIT TO THE CLERK A STAMPED ENVELOPE ADDRESSED TO THE DEFENDANT TOGETHER WITH A WRITTEN NOTICE IN CLEAR TYPE OF NO LESS THAN TWELVE-POINT IN SIZE, IN BOTH ENGLISH AND SPANISH, AND CONTAINING THE FOLLOWING LANGUAGE: NOTICE OF LAWSUIT (DATE) (NAME OF COURT) (COUNTY) (STREET ADDRESS, ROOM NUMBER) (CITY, STATE, ZIP CODE) (NAME OF DEFENDANT) (ADDRESS OF DEFENDANT) PLAINTIFF:__________________________________ DEFENDANT:__________________________________ NAME OF ORIGINAL CREDITOR, UNLESS SAME:______________________________ INDEX NUMBER:_______________________________ ATTENTION: A LAWSUIT HAS BEEN FILED AGAINST YOU CLAIMING THAT YOU OWE MONEY FOR AN UNPAID CREDIT CARD, MEDICAL, STUDENT LOAN OR OTHER DEBT. YOU SHOULD GO TO THE COURT CLERK'S OFFICE AT THE ABOVE ADDRESS AS SOON AS POSSIBLE TO RESPOND TO THE LAWSUIT. YOU MAY WISH TO CONTACT AN ATTOR- NEY. IF YOU DO NOT HAVE AN ATTORNEY, HELP IS AVAILABLE AT THE COURT. IF YOU DO NOT RESPOND TO THE LAWSUIT, THE COURT MAY ENTER A JUDGMENT AGAINST YOU. ONCE ENTERED, A JUDGMENT IS GOOD AND CAN BE USED AGAINST YOU FOR TWENTY YEARS, AND YOUR MONEY, INCLUDING A PORTION OF YOUR PAYCHECK AND/OR BANK ACCOUNT, MAY BE TAKEN. ALSO, A JUDGMENT WILL HURT YOUR CREDIT SCORE AND CAN AFFECT YOUR ABILITY TO RENT A HOME, FIND A JOB, OR TAKE OUT A LOAN. YOU CANNOT BE ARRESTED OR SENT TO JAIL FOR OWING A DEBT. IT IS IMPORTANT THAT YOU GO TO THE COURT CLERK'S OFFICE LISTED ABOVE AND BRING THIS NOTICE WITH YOU. ADDITIONAL INFORMATION CAN BE FOUND AT THE COURT SYSTEM WEBSITE AT: WWW.COURTS.STATE.NY.US 2. THE FACE OF THE ENVELOPE SHALL BE ADDRESSED TO THE DEFENDANT AT THE ADDRESS AT WHICH PROCESS WAS SERVED, AND SHALL CONTAIN THE DEFENDANT'S NAME, ADDRESS (INCLUDING APARTMENT NUMBER) AND ZIP CODE. THE FACE OF THE ENVELOPE ALSO SHALL STATE THE APPROPRIATE CLERK'S OFFICE AS ITS RETURN ADDRESS. 3. THE CLERK PROMPTLY SHALL MAIL TO THE DEFENDANT THE ENVELOPE CONTAINING THE ADDITIONAL NOTICE SET FORTH IN SUBDIVISION ONE OF THIS SECTION. NO DEFAULT JUDGMENT BASED ON THE DEFENDANT'S FAILURE TO ANSWER SHALL BE ENTERED UNLESS THERE HAS BEEN COMPLIANCE WITH THIS SECTION, AND AT LEAST TWENTY DAYS HAVE ELAPSED FROM THE DATE OF MAILING BY THE CLERK. S 5. Subdivision (a) of section 3012 of the civil practice law and rules is amended to read as follows:S. 677--B 3
(a) Service of pleadings. The complaint may be served with the summons, EXCEPT THAT IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRAN- SACTION, THE COMPLAINT SHALL BE SERVED WITH THE SUMMONS. A subsequent pleading asserting new or additional claims for relief shall be served upon a party who has not appeared in the manner provided for service of a summons. In any other case, a pleading shall be served in the manner provided for service of papers generally. Service of an answer or reply shall be made within twenty days after service of the pleading to which it responds. S 6. Rule 3016 of the civil practice law and rules is amended by adding a new subdivision (i) to read as follows: (I) CONSUMER CREDIT TRANSACTIONS. IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A DEFENDANT, THE CONTRACT OR OTHER WRITTEN INSTRUMENT ON WHICH THE ACTION IS BASED SHALL BE ATTACHED TO THE COMPLAINT AND THE FOLLOWING INFORMA- TION SHALL BE SET FORTH IN THE COMPLAINT: 1. THE NAME OF THE ORIGINAL CREDITOR; 2. THE LAST FOUR DIGITS OF THE ORIGINAL ACCOUNT NUMBER; 3. THE DATE AND AMOUNT OF THE LAST PAYMENT; 4. IF THE COMPLAINT CONTAINS A CAUSE OF ACTION BASED ON AN ACCOUNT STATED, THE DATE THAT THE FINAL STATEMENT OF ACCOUNT WAS MAILED TO THE DEFENDANT; 5. AN ITEMIZATION OF THE AMOUNT SOUGHT, BY (I) PRINCIPAL; (II) FINANCE CHARGE OR CHARGES; (III) FEES IMPOSED BY THE ORIGINAL CREDITOR; (IV) COLLECTION COSTS; (V) ATTORNEY'S FEES; (VI) INTEREST; AND (VII) ANY OTHER FEES AND CHARGES. THE TERM "FINANCE CHARGE" MEANS A FINANCE CHARGE AS DEFINED IN REGULATION Z, 12 C.F.R. S 226.4. 6. WHETHER THE PLAINTIFF IS THE ORIGINAL CREDITOR. IF THE PLAINTIFF IS NOT THE ORIGINAL CREDITOR, THE COMPLAINT SHALL STATE (I) THE DATE ON WHICH THE DEBT WAS ASSIGNED TO THE PLAINTIFF; AND (II) THE NAME OF EACH PREVIOUS OWNER OF THE ACCOUNT AND THE DATE ON WHICH THE DEBT WAS ASSIGNED TO THAT OWNER. 7. ANY MATTERS REQUIRED TO BE STATED WITH PARTICULARITY PURSUANT TO RULE 3015 OF THIS ARTICLE. S 7. Subdivision (e) of rule 3211 of the civil practice law and rules, as amended by chapter 616 of the laws of 2005, is amended to read as follows: (e) Number, time and waiver of objections; motion to plead over. At any time before service of the responsive pleading is required, a party may move on one or more of the grounds set forth in subdivision (a) OF THIS RULE, and no more than one such motion shall be permitted. Any objection or defense based upon a ground set forth in paragraphs one, three, four, five and six of subdivision (a) OF THIS RULE is waived unless raised either by such motion or in the responsive pleading. A motion based upon a ground specified in paragraph two, seven or ten of subdivision (a) OF THIS RULE may be made at any subsequent time or in a later pleading, if one is permitted; IN ANY ACTION OTHER THAN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRANSACTION WHERE A PURCHASER, BORROWER OR DEBTOR IS A DEFENDANT, an objection that the summons and complaint, summons with notice, or notice of petition and petition was not properly served is waived if, having raised such an objection in a pleading, the objecting party does not move for judgment on that ground within sixty days after serving the pleading, unless the court extends the time upon the ground of undue hardship. The foregoing sentence shall not apply in any proceeding under subdivision one or two of section seven hundred eleven of the real property actions and proceedings law. The papers inS. 677--B 4
opposition to a motion based on improper service shall contain a copy of the proof of service, whether or not previously filed. An objection based upon a ground specified in paragraph eight or nine of subdivision (a) OF THIS RULE is waived if a party moves on any of the grounds set forth in subdivision (a) OF THIS RULE without raising such objection or if, having made no objection under subdivision (a) OF THIS RULE, he or she does not raise such objection in the responsive pleading. S 8. Subdivision (f) of section 3215 of the civil practice law and rules, as amended by chapter 453 of the laws of 2006, is amended and a new subdivision (j) is added to read as follows: (f) Proof. On any application for judgment by default, the applicant shall file proof of service of the summons and the complaint, or a summons and notice served pursuant to subdivision (b) of rule 305 or subdivision (a) of rule 316 of this chapter, and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party, or where the state of New York is the plaintiff, by affi- davit made by an attorney from the office of the attorney general who has or obtains knowledge of such facts through review of state records or otherwise. Where a verified complaint has been served, it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or the party's attorney. IN AN ACTION ARISING OUT OF A CONSUMER CREDIT TRANSACTION, IF THE PLAINTIFF IS NOT THE ORIGINAL CREDITOR, THE APPLI- CANT SHALL INCLUDE: (I) AN AFFIDAVIT BY THE ORIGINAL CREDITOR OF THE FACTS CONSTITUTING THE DEBT, THE DEFAULT IN PAYMENT, THE SALE OR ASSIGN- MENT OF THE DEBT, AND THE AMOUNT DUE AT THE TIME OF SALE OR ASSIGNMENT; (II) FOR EACH SUBSEQUENT ASSIGNMENT OR SALE OF THE DEBT TO ANOTHER ENTI- TY, AN AFFIDAVIT OF SALE OF THE DEBT BY THE DEBT SELLER, COMPLETED BY THE SELLER OR ASSIGNOR; AND (III) AN AFFIDAVIT OF A WITNESS OF THE PLAINTIFF, WHICH INCLUDES A CHAIN OF TITLE OF THE DEBT, COMPLETED BY THE PLAINTIFF OR PLAINTIFF'S WITNESS. When jurisdiction is based on an attachment of property, the affidavit must state that an order of attachment granted in the action has been levied on the property of the defendant, describe the property and state its value. Proof of mailing the notice required by subdivision (g) of this section, where applica- ble, shall also be filed. (J) A REQUEST FOR A DEFAULT JUDGMENT ENTERED BY THE CLERK, MUST BE ACCOMPANIED BY AN AFFIDAVIT BY THE DEBT COLLECTOR (WHO MAY BE THE PLAIN- TIFF OR PLAINTIFF'S ATTORNEY) STATING THAT AFTER REASONABLE INQUIRY, HE OR SHE HAS REASON TO BELIEVE THAT THE STATUTE OF LIMITATIONS HAS NOT EXPIRED. S 9. The civil practice law and rules is amended by adding a new section 7515 to read as follows: S 7515. CONFIRMATION OF AN AWARD BASED ON A CONSUMER CREDIT TRANS- ACTION. IN ANY PROCEEDING UNDER SECTION 7510 OF THIS ARTICLE TO CONFIRM AN AWARD BASED ON A CONSUMER CREDIT TRANSACTION, THE PARTY SEEKING TO CONFIRM THE AWARD SHALL PLEAD THE ACTUAL TERMS AND CONDITIONS OF THE AGREEMENT TO ARBITRATE. THE PARTY SHALL ATTACH TO ITS PETITION (1) THE AGREEMENT TO ARBITRATE; (2) THE DEMAND FOR ARBITRATION OR NOTICE OF INTENTION TO ARBITRATE, WITH PROOF OF SERVICE; AND (3) THE ARBITRATION AWARD, WITH PROOF OF SERVICE. IF THE AWARD DOES NOT CONTAIN A STATEMENT OF THE CLAIMS SUBMITTED FOR ARBITRATION, OF THE CLAIMS RULED UPON BY THE ARBITRATOR, AND OF THE CALCULATION OF FIGURES USED BY THE ARBITRATOR IN ARRIVING AT THE AWARD, THEN THE PETITION SHALL CONTAIN SUCH A STATEMENT. THE COURT SHALL NOT GRANT CONFIRMATION OF AN AWARD BASED ON A CONSUMERS. 677--B 5
CREDIT TRANSACTION UNLESS THE PARTY SEEKING TO CONFIRM THE AWARD HAS COMPLIED WITH THIS SECTION. S 10. 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; (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 NOTS. 677--B 6
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. FOR MORE INFORMATION ABOUT YOUR RIGHTS UNDER STATE AND FEDERAL DEBT COLLECTION PROCEDURES LAW, CONTACT THE CONSUMER PROTECTION DIVISION OF THE NEW YORK STATE DEPARTMENT OF STATE AT (INSERT THE CURRENT TELEPHONE NUMBER ESTABLISHED BY THE CONSUMER PROTECTION DIVISION FOR RECEIVING INQUIRIES FROM CONSUMERS) OR (INSERT THE CURRENT ADDRESS OF THE WEBSITE OR WEBPAGE CREATED PURSUANT TO PARAGRAPH (P) OF SUBDIVISION THREE OF SECTION NINETY-FOUR-A OF THE EXECUTIVE LAW). YOU MAY ALSO CONTACT THE NEW YORK STATE ATTORNEY 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 DEPART- MENT OF LAW). THE NOTICE REQUIRED BY THIS SUBDIVISION SHALL BE PRINTED OR WRITTEN IN AT LEAST TEN POINT BOLD TYPE. S 11. 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 12. Subdivision 3 of section 94-a of the executive law, as added by section 21 of part A of chapter 62 of the laws of 2011, is amended to read as follows: 3. Powers of the consumer protection division. [(a)]The division shall have the power and duty to: [(1)](A) receive complaints of consumers, attempt to mediate such complaints where appropriate, and refer complaints to the appropriate unit of the department, or federal, state or local agency authorized by law for appropriate action on such complaints; [(2)](B) coordinate the activities of all state agencies performing consumer protection functions; [(3)](C) initiate and encourage consumer education programs; [(4)](D) conduct investigations, research, studies and analyses of matters affecting the interests of consumers;S. 677--B 7
[(5)](E) cooperate with and assist the attorney general and the department of financial services in the carrying out of legal enforce- ment responsibilities for the protection of consumers; [(6)](F) implement other powers and duties by regulation and other- wise as prescribed by any provision of law; [(7) (i)](G) (1) advise and make recommendations to the governor on matters affecting the consumers of the state and promote and encourage the protection of the legitimate interests of consumers within the state; [(ii)](2) study the operation of consumer protection laws and recom- mend to the governor new laws and amendments of laws for consumer protection; [(8)](H) represent the interests of consumers of the state before federal, state and local administrative and regulatory agencies; [(9)](I) establish a process by which victims of identity theft will receive assistance and information to resolve complaints. To implement the process the secretary shall have the authority to: [(i)](1) promulgate rules and regulations to administer the identity theft prevention and mitigation program; and [(ii)](2) act as a liaison between the victim and any state agency, public authority, or any municipal department or agency, the division of state police, and county or municipal police departments, and any non- governmental entity, including but not limited to, consumer credit reporting agencies, to facilitate the victim obtaining such assistance and data as will enable the program to carry out its duties to help consumers resolve the problems that have resulted from the identity theft. Trade secrets and proprietary business information contained in the documents or records that may be received by the division shall be exempt from disclosure to the extent allowed by article six of the public officers law; [(10)](J) undertake activities to encourage business and industry to maintain high standards of honesty, fair business practices, and public responsibility in the production, promotion and sale of consumer goods and services; [(11)](K) conduct product research and testing and, where appropri- ate, contract with private agencies and firms for the performance of such services; [(12)](L) cooperate with and assist local governments in the develop- ment of consumer protection activities; [(13)](M) establish advisory councils to assist in policy formulation on specific consumer problems; [(14)](N) cooperate with and assist consumers in class actions in proper cases; [and (15)](O) create an internet website or webpage pursuant to section three hundred ninety-c of the general business law [.]; AND (P) 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 13. This act shall take effect on the first of January next succeed- ing the date on which it shall have become a law, except that section three of this act shall take effect on the one hundred eightieth day after this act shall have become a law.