Prohibits debt collectors from collecting or attempting to collect a debt owed by a deceased debtor that is known by such debt collector to be deceased.

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S707-2011 Actions

• Jan 4, 2012: REFERRED TO CONSUMER PROTECTION
• Jan 5, 2011: REFERRED TO CONSUMER PROTECTION

S707-2011 Memo

BILL NUMBER:S707

TITLE OF BILL:
An act
to amend the general business law, in relation to
prohibiting debt collectors from collecting or attempting to collect a
debt owed by a deceased debtor that is known to be deceased

PURPOSE OF BILL:
This bill would require that debt collection agencies that are
attempting to collect outstanding debts of deceased individuals from
surviving family and household members inform them that they are not
legally obligated to repay the debts of the deceased.

SUMMARY OF SPECIFIC PROVISIONS:
Section one amends the general business law by adding a new section
601-a. This section requires that all principal creditors and debt
collection agencies must disclose to all persons contacted regarding
a debt incurred by a deceased debtor that such person is not legally
required to pay that he or she is not legally required to repay such
deceased debtor's debts. Any aggrieved person may bring an action
against such a practice and recover a civil penalty. Class actions to
recover damages are specifically authorized.

JUSTIFICATION:
Recent investigations have shown that debt collection companies often
pursue payments from relatives of deceased debtors. A New York Times
article described the practices of a debt collection agency whose
agents are specially trained to employ "empathic active listening"
techniques to comfort grieving families while luring them into paying
the deceased's debts. This may be a violation of the Fair Debt
Collection Practices Act since this law prevents collection companies
from contacting anyone other than the debtor about outstanding bills.
Even if this practice is not illegal, this legislation will ensure
that debt collectors are required to notify the relatives that they
contact that they have no legal obligation to payoff the debt of the
deceased. As it stands, relatives of deceased debtors are not
required by law to assume their loved ones' debts but collection
agencies often omit this information when they ask the relatives to
make payments on outstanding bills.

PRIOR LEGISLATIVE HISTORY:
2010: S.7205 Same as A.7889-B - Passed Assembly

FISCAL IMPLICATIONS:
None.

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

S707-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     707

                         2011-2012 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 5, 2011
                                 ___________

  Introduced  by  Sen.  SAVINO -- 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  prohibiting
    debt  collectors  from collecting or attempting to collect a debt owed
    by a deceased debtor that is known to be deceased

    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.  PROHIBITED PRACTICES REGARDING DECEASED DEBTORS. 1. FOR THE
  PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE  THE  FOLLOWING
  MEANINGS:

    (A) "DEBT" MEANS ANY OBLIGATION OR ALLEGED OBLIGATION OF A CONSUMER TO
  PAY  MONEY  ARISING  OUT  OF A TRANSACTION IN WHICH THE MONEY, PROPERTY,
  INSURANCE, OR SERVICES WHICH ARE THE  SUBJECT  OF  THE  TRANSACTION  ARE
  PRIMARILY  FOR  PERSONAL,  FAMILY, OR HOUSEHOLD PURPOSES, WHETHER OR NOT
  SUCH OBLIGATION HAS BEEN REDUCED TO JUDGMENT; AND
    (B) "DEBT COLLECTOR" MEANS AN INDIVIDUAL WHO, AS PART OF  HIS  OR  HER
  JOB, REGULARLY COLLECTS OR ATTEMPTS 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.
    2.    ANY  PRINCIPAL CREDITOR OR DEBT COLLECTOR COMMUNICATING WITH ANY
  PERSON FOR THE PURPOSE OF ATTEMPTING TO COLLECT A  DEBT  INCURRED  BY  A
  DECEASED  DEBTOR  THAT SUCH PERSON IS NOT LEGALLY REQUIRED TO PAY, SHALL
  DISCLOSE TO SUCH PERSON THAT HE OR SHE IS NOT LEGALLY  REQUIRED  TO  PAY
  SUCH  DEBT. IN ADDITION, SUCH PRINCIPAL CREDITOR OR DEBT COLLECTOR SHALL
  NOT MAKE ANY MISREPRESENTATION ABOUT SUCH  PERSON'S  OBLIGATION  TO  PAY
  SUCH DEBT.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD02253-01-1

 S. 707                              2

    3.  (A)  IN  ADDITION  TO  ANY RIGHT OF ACTION GRANTED TO THE ATTORNEY
  GENERAL PURSUANT TO THIS ARTICLE, ANY PERSON AGGRIEVED BY REASON OF  ANY
  VIOLATION  OF THIS SECTION MAY BRING AN ACTION IN HIS OR HER OWN NAME TO
  ENJOIN SUCH UNLAWFUL ACT OR PRACTICE, AN ACTION TO RECOVER  HIS  OR  HER
  ACTUAL  DAMAGES  OR  FIVE HUNDRED DOLLARS, WHICHEVER IS GREATER, OR BOTH
  SUCH ACTIONS. IN THE CASE OF ANY SUCCESSFUL ACTION TO ENFORCE THE  FORE-
  GOING  LIABILITY,  THE  COURT MAY AWARD THE COSTS OF THE ACTION TOGETHER
  WITH REASONABLE ATTORNEY'S FEES. EACH COMMUNICATION THAT FAILS TO COMPLY
  WITH THE REQUIREMENTS  OF  THIS  SECTION  SHALL  CONSTITUTE  A  SEPARATE
  VIOLATION.
    (B)  ANY  CONSUMER  ENTITLED TO BRING AN ACTION UNDER THIS SUBDIVISION
  MAY, IF THE UNLAWFUL ACT OR PRACTICE HAS CAUSED DAMAGE TO OTHER  CONSUM-
  ERS  SIMILARLY  SITUATED,  BRING AN ACTION ON BEHALF OF HIMSELF AND SUCH
  OTHER CONSUMERS TO RECOVER DAMAGES OR OBTAIN OTHER  RELIEF  AS  PROVIDED
  FOR IN THIS SUBDIVISION. ANY ACTION BROUGHT UNDER THIS SUBDIVISION SHALL
  COMPLY WITH ARTICLE NINE OF THE CIVIL PRACTICE LAW AND RULES.
    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]
  WILLFULLY VIOLATES the terms of this  article  [shall  be],  EXCEPT  THE
  TERMS  CONTAINED IN SECTION SIX HUNDRED ONE-A OF THIS ARTICLE, IS guilty
  of a misdemeanor, and each such violation shall  be  deemed  a  separate
  offense.
    S  3.  This  act shall take effect on the ninetieth day after it shall
  have become a law.