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

                                   455

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced by M. of A. DINOWITZ, MILLMAN, COLTON, GALEF, JAFFEE, CAHILL,
  ROBINSON,  ROSENTHAL,  CLARK, HOOPER -- Multi-Sponsored by -- M. of A.
  BOYLAND, GLICK, MAGEE, MAISEL, PERRY,  RIVERA,  SCARBOROUGH,  SWEENEY,
  WEISENBERG  --  read  once  and  referred to the Committee on Consumer
  Affairs and Protection

AN ACT to amend the general business law and the civil practice law  and
  rules, in relation to debt collection agencies

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

  Section 1. Legislative intent. The legislature hereby finds the  pres-
ence  of consumer-related problems with respect to the practices of debt
collection agencies. Federal and state laws regulate how debt collectors
may communicate with debtors and prohibit the use of  certain  threaten-
ing,  deceptive  and  unfair  collection  practices. Despite these legal
protections, the number of consumer complaints regarding debt collection
practices continue to rise. Consumer complaints received by the  Federal
Trade  Commission  regarding  third-party  debt  collectors grew for the
thirteenth consecutive year  in  2010,  and  consumers  filed  with  the
Commission  more  complaints against third-party collectors than against
any other specific industry. While the majority of those engaged in  the
business  of  debt  collection are honest and ethical in their dealings,
there is a minority of unscrupulous  collection  agencies  in  operation
that practice abusive tactics. Due to the sensitive nature of the infor-
mation  used  in  the course of such agency's everyday business, and the
vulnerable position consumers find themselves in when dealing with these
agencies, it is incumbent upon this legislature to  protect  the  inter-
ests,  reputations  and  fiscal well-being of the citizens of this state
against those agencies who would abuse  their  privilege  of  operation.
Therefore,  it  is  herein  declared  that the state should license debt
collection agencies.
  S 2. The general business law is  amended  by  adding  a  new  article
29-HHH to read as follows:

              

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00239-02-3

A. 455                              2

                             ARTICLE 29-HHH
                        DEBT COLLECTION AGENCIES
SECTION 604-K. DEFINITIONS.
        604-L. DEBT COLLECTION AGENCIES.
        604-M. SURETY BONDING REQUIREMENT.
        604-N. PENALTIES.
        604-O. APPLICABILITY.
  S  604-K.  DEFINITIONS.  AS  USED IN THIS ARTICLE, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  1. (A) "DEBT COLLECTION AGENCY" SHALL MEAN A PERSON,  FIRM  OR  CORPO-
RATION  ENGAGED  IN BUSINESS, THE PRINCIPAL PURPOSE OF WHICH IS TO REGU-
LARLY COLLECT OR ATTEMPT TO COLLECT DEBTS OWED OR DUE OR ASSERTED TO  BE
OWED OR DUE TO ANOTHER AND SHALL ALSO INCLUDE A BUYER OF DELINQUENT DEBT
WHO  SEEKS  TO COLLECT SUCH DEBT EITHER DIRECTLY OR THROUGH THE SERVICES
OF ANOTHER BY, INCLUDING BUT NOT LIMITED TO, INITIATING OR  USING  LEGAL
PROCESSES OR OTHER MEANS TO COLLECT OR ATTEMPT TO COLLECT SUCH DEBT.
  (B) THE TERM DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDI-
TOR WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDI-
TOR;
  (II) ANY OFFICER OR EMPLOYEE OF A DEBT COLLECTION AGENCY;
  (III)  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;
  (IV) ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS  ON
ANY  OTHER  PERSON  IN  CONNECTION  WITH THE JUDICIAL ENFORCEMENT OF ANY
DEBT;
  (V) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACITY
ON BEHALF OF AND IN THE NAME OF A CLIENT SOLELY THROUGH ACTIVITIES  THAT
MAY   ONLY   BE   PERFORMED   BY   A  LICENSED  ATTORNEY,  BUT  NOT  ANY
ATTORNEY-AT-LAW OR LAW FIRM OR PART THEREOF  WHO  REGULARLY  ENGAGES  IN
ACTIVITIES  TRADITIONALLY  PERFORMED  BY DEBT COLLECTORS, INCLUDING, BUT
NOT LIMITED TO, CONTACTING A DEBTOR THROUGH THE MAIL  OR  VIA  TELEPHONE
WITH  THE PURPOSE OF COLLECTING A DEBT OR OTHER ACTIVITIES AS DETERMINED
BY RULE OF THE SECRETARY;
  (VI) ANY PERSON EMPLOYED BY A UTILITY REGULATED UNDER  THE  PROVISIONS
OF THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
  (VII)  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;
  (VIII) 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;
  (IX)  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; OR
  (X) ANY PERSON, FIRM OR CORPORATION ENGAGED IN BUSINESS, THE PRINCIPAL
PURPOSE  OF  WHICH  IS  TO REGULARLY COLLECT OR ATTEMPT TO COLLECT DEBTS
OWED OR DUE OR ASSERTED TO BE OWED OR DUE TO ANOTHER  PERSON  WHERE  THE

A. 455                              3

DEBT  IS  ENFORCED  FOR  CHILD  SUPPORT, SPOUSAL SUPPORT, MAINTENANCE OR
ALIMONY, PROVIDED, HOWEVER, THAT IF SUCH  PERSON,  FIRM  OR  CORPORATION
ALSO  REGULARLY  COLLECTS  OR ATTEMPTS TO COLLECT DEBTS OTHER THAN THOSE
ENFORCED  FOR  CHILD  SUPPORT,  SPOUSAL SUPPORT, MAINTENANCE OR ALIMONY,
SUCH PERSON MUST COMPLY WITH THE REQUIREMENTS OF THIS ARTICLE.
  2. "CONSUMER" MEANS ANY NATURAL PERSON OBLIGATED  OR  ALLEGEDLY  OBLI-
GATED TO PAY ANY DEBT.
  3.  "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.
  4. "DEPARTMENT" MEANS THE DEPARTMENT OF STATE.
  5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
  6. "SECRETARY" MEANS THE SECRETARY OF STATE.
  S  604-L.  DEBT COLLECTION AGENCIES. 1. ON OR AFTER OCTOBER FIRST, TWO
THOUSAND FOURTEEN, NO PERSON SHALL ACT AS A DEBT COLLECTION AGENCY WITH-
OUT FIRST HAVING OBTAINED A LICENSE IN ACCORDANCE WITH THE PROVISIONS OF
THIS ARTICLE, AND WITHOUT FIRST  BEING  IN  COMPLIANCE  WITH  ALL  OTHER
APPLICABLE LAWS, RULES AND REGULATIONS.
  2. (A) ALL LICENSES ISSUED PURSUANT TO THIS ARTICLE SHALL BE VALID FOR
TWO YEARS UNLESS SOONER SUSPENDED OR REVOKED. THE SECRETARY SHALL ESTAB-
LISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
  (B)  THE  FEE  FOR  A LICENSE OR RENEWAL THEREOF SHALL BE FIVE HUNDRED
DOLLARS.
  3. (A) EACH PERSON APPLYING FOR A DEBT COLLECTION  AGENCY  LICENSE  OR
RENEWAL THEREOF SHALL FILE AN APPLICATION IN SUCH FORM AND DETAIL AS THE
SECRETARY MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS SECTION.
  (B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SECRETARY SHALL
REQUIRE  THE  FOLLOWING  INFORMATION, AND SHALL, AS APPROPRIATE, REQUIRE
SUCH INFORMATION NOT ONLY OF THE APPLICANT BUT ALSO OF ANY OF ITS  PRIN-
CIPALS,  PARTNERS,  OFFICERS  AND  DIRECTORS,  OR  ANY  PERSON OR ENTITY
CONTROLLING AN INTEREST GREATER THAN TEN PERCENT:
  (I) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
  (II) THE BUSINESS NAME, IF OTHER THAN APPLICANT;
  (III) THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE  STREET
AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
  (IV) THE BUSINESS TELEPHONE OF THE APPLICANT;
  (V)  THE  LENGTH OF TIME THAT THE APPLICANT HAS BEEN A DEBT COLLECTION
AGENCY;
  (VI) A STATEMENT INDICATING WHETHER THE APPLICANT HAS:
  (A) BEEN CONVICTED OF ANY CRIME OR IS A DEBTOR  ON  ANY  UNPAID  CIVIL
JUDGMENT RELATING TO WORK AS A DEBT COLLECTION AGENCY; AND
  (B)  AT  ANY  TIME  IN THE PAST BEEN ISSUED A LICENSE PURSUANT TO THIS
ARTICLE, OR HAS BEEN ISSUED A LICENSE FOR DEBT COLLECTION ACTIVITIES  BY
ANY  OTHER STATE OR LOCAL AUTHORITY, AND IF SO, WHETHER SUCH LICENSE WAS
EVER REVOKED OR SUSPENDED;
  (VII) A DETAILED DESCRIPTION OF  THE  BUSINESS  PRACTICES  OR  METHODS
USED,  OR  INTENDED TO BE USED, BY THE APPLICANT TO CONFIRM THE VALIDITY
OF THE DEBTS IT SEEKS TO COLLECT FROM CONSUMERS;
  (VIII) A SUMMARY OF THE APPLICANT'S RECORD-KEEPING POLICY,  INCLUDING,
BUT NOT LIMITED TO:
  (A)  THE  LENGTH  OF TIME THE APPLICANT MAINTAINS, OR INTENDS TO MAIN-
TAIN, RECORDS PERTAINING TO CONSUMERS; AND
  (B) THE MANNER IN WHICH THE APPLICANT RECORDS AND STORES,  OR  INTENDS
TO  RECORD AND STORE: CONSUMER CHALLENGES TO THE VALIDITY OF DEBT; BILL-

A. 455                              4

ING ERRORS; PAYMENTS MADE BY A CONSUMER; SETTLEMENT AGREEMENTS; INFORMA-
TION REGARDING PARTIES RESPONSIBLE FOR DEBT; ANY STATEMENTS  MADE  BY  A
CONSUMER  ALLEGING  THAT  THE  DEBT  AROSE  FROM IDENTITY THEFT; AND ANY
STATEMENTS  MADE BY A CONSUMER STATING THAT THE CONSUMER RECEIVED STATU-
TORILY EXEMPT INCOME AS DEFINED IN SECTION FIFTY-TWO HUNDRED  TWENTY-TWO
OF THE CIVIL PRACTICE LAW AND RULES;
  (IX) WHETHER THE APPLICANT REGULARLY SELLS, OR INTENDS TO SELL, DEBTS.
IF  THE  APPLICANT SELLS, OR INTENDS TO SELL DEBTS, SUCH APPLICANT SHALL
BE REQUIRED TO PROVIDE THE SECRETARY WITH A SUMMARY OF  THE  APPLICANT'S
POLICY  WITH  RESPECT  TO THE INFORMATION REGARDING A CONSUMER'S ACCOUNT
THAT IT TRANSMITS, OR WILL TRANSMIT, TO THE PURCHASER OF A DEBT; AND
  (X) A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET  FORTH
IN THE APPLICATION IS CURRENT AND ACCURATE.
  (C)  AN APPLICANT WHO IS A NON-RESIDENT OF THE STATE SHALL PROVIDE THE
NAME AND ADDRESS OF A REGISTERED AGENT WITHIN THE STATE OR DESIGNATE THE
SECRETARY AS HIS OR HER AGENT UPON WHOM PROCESS  OR  OTHER  NOTIFICATION
MAY BE SERVED.
  4.  IN  DETERMINING WHETHER TO ISSUE OR RENEW A LICENSE, THE SECRETARY
SHALL CONSIDER THE CHARACTER, COMPETENCY AND INTEGRITY OF THE APPLICANT.
THE SECRETARY MAY REFUSE TO ISSUE OR RENEW A LICENSE TO ANY PERSON, FIRM
OR CORPORATION WHOM HE OR SHE FINDS HAS: (A) BEEN CONVICTED OF ANY CRIME
DEFINED IN ARTICLE ONE HUNDRED FIFTY-FIVE OF THE PENAL  LAW  OR  ARTICLE
TWENTY-TWO-A  OF  THIS CHAPTER OR FAILED TO PAY ANY FINAL CIVIL JUDGMENT
RELATING TO WORK AS A DEBT COLLECTION AGENCY, IF SUCH  REFUSAL,  IN  THE
JUDGMENT  OF THE SECRETARY, BEST PROMOTES THE INTERESTS OF THE PEOPLE OF
THIS STATE; OR
  (B) VIOLATED ARTICLE TWENTY-NINE-H OF THIS CHAPTER OR THE FEDERAL FAIR
DEBT COLLECTION PRACTICES ACT (15 USC S 1692 ET SEQ.).
  ALL DETERMINATIONS BY THE SECRETARY TO ISSUE OR RENEW A LICENSE  SHALL
BE  MADE  IN  ACCORDANCE WITH SUBDIVISION SIXTEEN OF SECTION TWO HUNDRED
NINETY-SIX OF THE  EXECUTIVE  LAW  AND  ARTICLE  TWENTY-THREE-A  OF  THE
CORRECTION LAW.
  5.  NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE DEPART-
MENT SHALL BE GIVEN TO THE DEPARTMENT AT ITS OFFICES  IN  ALBANY  WITHIN
TEN DAYS OF CHANGES OF NAME OR ADDRESS BY LICENSED DEBT COLLECTION AGEN-
CIES.  THE FEE FOR FILING EACH CHANGE OF NAME OR ADDRESS NOTICE SHALL BE
TEN DOLLARS.
  6. THE FEES ESTABLISHED BY THIS SECTION SHALL NOT BE REFUNDABLE.
  7.  EACH  DEBT  COLLECTION  AGENCY  ENGAGED  IN COLLECTING DEBTS SHALL
COMMUNICATE HIS OR HER LICENSE NUMBER UPON THE REQUEST OF ANY INTERESTED
PARTY. ANY ADVERTISEMENT, LETTERHEAD, RECEIPT OR OTHER PRINTED MATTER OF
A LICENSEE MUST CONTAIN THE LICENSE NUMBER ASSIGNED TO THE  LICENSEE  BY
THE  DEPARTMENT.  SUCH LICENSE NUMBER SHALL BE CLEARLY AND CONSPICUOUSLY
DISPLAYED.
  8. NO PERSON, FIRM OR CORPORATION SHALL: (A) PRESENT,  OR  ATTEMPT  TO
PRESENT, AS HIS, HER OR ITS OWN, THE LICENSE NUMBER OF ANOTHER;
  (B)  KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE DEPART-
MENT FOR THE PURPOSE OF PROCURING A LICENSE;
  (C) FALSELY REPRESENT THEMSELVES TO  BE  A  LICENSED  DEBT  COLLECTION
AGENCY;
  (D) USE OR ATTEMPT TO USE A LICENSE WHICH HAS EXPIRED;
  (E) OFFER TO PERFORM OR PERFORM ANY COLLECTION OF DEBTS WITHOUT HAVING
A CURRENT LICENSE AS IS REQUIRED UNDER THIS ARTICLE; OR
  (F)  REPRESENT  IN ANY MANNER THAT HIS, HER OR ITS LICENSE CONSTITUTES
AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF  THE  DEBT
COLLECTION AGENCY.

A. 455                              5

  9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
BLE OR ASSIGNABLE.
  10.  THE  SECRETARY  SHALL  ISSUE EACH DEBT COLLECTION AGENCY A UNIQUE
LICENSE NUMBER.
  11. THE DEPARTMENT SHALL  MAINTAIN  AND  PUBLISH  A  REGISTRY  OF  ALL
LICENSED  DEBT  COLLECTION  AGENCIES, WHICH SHALL LIST AND IDENTIFY, ALL
LICENSED DEBT COLLECTION AGENCIES DOING  BUSINESS  IN  THIS  STATE.  THE
DEPARTMENT SHALL MAKE THE REGISTRY AVAILABLE ON ITS WEBSITE.
  12.  (A) THE SECRETARY SHALL ADOPT SUCH RULES AND REGULATIONS AS HE OR
SHE MAY DETERMINE ARE NECESSARY FOR THE ADMINISTRATION  AND  ENFORCEMENT
OF   THIS  ARTICLE,  AND  SHALL  PROVIDE  WRITTEN  NOTIFICATION  OF  THE
PROVISIONS OF THIS ARTICLE TO  ALL  DEBT  COLLECTION  AGENCIES  LICENSED
PURSUANT TO THIS ARTICLE.
  (B)  IN  ADDITION TO ANY OTHER POWERS OF THE SECRETARY, NOT IN LIMITA-
TION THEREOF, HE OR SHE SHALL HAVE THE POWER TO ENFORCE  THE  PROVISIONS
OF  THIS  ARTICLE,  TO INVESTIGATE ANY VIOLATION THEREOF, TO INVESTIGATE
THE BUSINESS, BUSINESS  PRACTICES  AND  BUSINESS  METHODS  OF  ANY  DEBT
COLLECTION  AGENCY, AND TO CONDUCT ROUTINE EXAMINATIONS OF THE FINANCIAL
SOLVENCY OF ANY DEBT COLLECTION AGENCY, IF IN THE OPINION OF THE  SECRE-
TARY,   SUCH  INVESTIGATION  OR  EXAMINATION  IS  WARRANTED.  EACH  DEBT
COLLECTION AGENCY SHALL BE OBLIGED,  ON  REQUEST  OF  THE  SECRETARY  OF
STATE,  TO  SUPPLY  SUCH INFORMATION, BOOKS, PAPERS OR RECORDS AS MAY BE
REQUIRED CONCERNING HIS, HER OR  ITS  BUSINESS,  BUSINESS  PRACTICES  OR
BUSINESS  METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE TO
COMPLY WITH A LAWFUL REQUEST OF THE SECRETARY  SHALL  BE  A  GROUND  FOR
DENYING  AN  APPLICATION  FOR A LICENSE, OR FOR REVOKING, SUSPENDING, OR
FAILING TO RENEW A LICENSE  ISSUED UNDER THIS ARTICLE.
  (C) THE DEPARTMENT SHALL HAVE THE  POWER  TO  REVOKE  OR  SUSPEND  ANY
LICENSE,  OR  IN LIEU THEREOF TO IMPOSE A FINE NOT LESS THAN ONE HUNDRED
DOLLARS NOR MORE THAN TWO THOUSAND DOLLARS PER  VIOLATION  OR  INSTANCE,
PAYABLE TO THE DEPARTMENT, OR REPRIMAND ANY LICENSEE OR DENY AN APPLICA-
TION FOR A LICENSE OR RENEWAL THEREOF UPON PROOF:
  (I)  THAT THE APPLICANT OR LICENSEE HAS VIOLATED ANY OF THE PROVISIONS
OF THIS ARTICLE OR THE RULES AND  REGULATIONS  PROMULGATED  PURSUANT  TO
THIS ARTICLE;
  (II)  THAT  THE  APPLICANT  OR LICENSEE HAS PRACTICED FRAUD, DECEIT OR
MISREPRESENTATION;
  (III) THAT THE APPLICANT OR LICENSEE HAS MADE A MATERIAL  MISSTATEMENT
IN THE APPLICATION FOR OR RENEWAL OF HIS OR HER LICENSE; OR
  (IV)  THAT  THE APPLICANT OR LICENSEE HAS DEMONSTRATED INCOMPETENCE OR
UNTRUSTWORTHINESS IN HIS OR HER ACTIONS.
  13. THE DEPARTMENT SHALL BEFORE DENYING AN APPLICATION FOR  A  LICENSE
OR  BEFORE  REVOKING  OR SUSPENDING ANY LICENSE, OR IMPOSING ANY FINE OR
REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE HEAR-
ING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN WRIT-
ING THE APPLICANT, OR THE HOLDER OF SUCH LICENSE, OF ANY CHARGE MADE AND
SHALL AFFORD SUCH APPLICANT OR LICENSEE AN OPPORTUNITY TO  BE  HEARD  IN
PERSON  OR  BY  COUNSEL IN REFERENCE THERETO. SUCH WRITTEN NOTICE MAY BE
SERVED PERSONALLY TO THE APPLICANT OR LICENSEE, OR BY CERTIFIED MAIL  TO
THE LAST KNOWN BUSINESS ADDRESS OF SUCH APPLICANT OR LICENSEE.
  14. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
DEPARTMENT  SHALL  PRESCRIBE  AND  SHALL BE CONDUCTED BY SUCH OFFICER OR
PERSON IN THE DEPARTMENT AS THE SECRETARY MAY DESIGNATE, WHO SHALL  HAVE
THE  POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON SO DESIG-
NATED, ANY PERSON IN THIS STATE AND  ADMINISTER  AN  OATH  TO  AND  TAKE
TESTIMONY  OF  ANY  PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A

A. 455                              6

SUBPOENA ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL PRAC-
TICE LAW AND RULES. SUCH OFFICER OR PERSON IN THE DEPARTMENT  DESIGNATED
TO  TAKE  SUCH  TESTIMONY  SHALL NOT BE BOUND BY COMMON LAW OR STATUTORY
RULES OF EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
  15.  IN  THE EVENT THAT THE DEPARTMENT SHALL DENY THE APPLICATION FOR,
OR REVOKE OR SUSPEND ANY SUCH LICENSE, OR IMPOSE ANY FINE OR  REPRIMAND,
ITS  DETERMINATION  SHALL  BE  IN  WRITING  AND  OFFICIALLY  SIGNED. THE
ORIGINAL OF SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED  IN  THE
OFFICE  OF  THE  DEPARTMENT  AND  COPIES  THEREOF SHALL BE MAILED TO THE
APPLICANT OR LICENSEE AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER  SUCH
FILING.
  16.  THE  DEPARTMENT,  ACTING  BY  THE  OFFICE OR PERSON DESIGNATED TO
CONDUCT THE HEARING PURSUANT TO SUBDIVISION THIRTEEN OF THIS SECTION  OR
BY  SUCH  OTHER  OFFICER OR PERSON IN THE DEPARTMENT AS THE SECRETARY OF
STATE MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF  ANY
LICENSEE  WHO  HAS  BEEN  CONVICTED  IN THIS STATE OR ANY OTHER STATE OR
TERRITORY OF A FELONY OR OF ANY MISDEMEANOR FOR A PERIOD  NOT  EXCEEDING
THIRTY  DAYS  PENDING  A  HEARING  AND  A  DETERMINATION OF CHARGES MADE
AGAINST HIM OR HER. IF SUCH HEARING IS ADJOURNED AT THE REQUEST  OF  THE
LICENSEE, OR BY REASON OF ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR
HER  BEHALF,  SUCH SUSPENSION MAY BE CONTINUED FOR THE ADDITIONAL PERIOD
OF SUCH ADJOURNMENT.
  17. THE ACTION OF THE DEPARTMENT IN GRANTING OR REFUSING TO  GRANT  OR
TO  RENEW  A  LICENSE UNDER THIS ARTICLE OR IN REVOKING OR SUSPENDING OR
REFUSING TO REVOKE OR SUSPEND SUCH A LICENSE OR  IMPOSING  ANY  FINE  OR
REPRIMAND  SHALL  BE  SUBJECT TO REVIEW BY A PROCEEDING INSTITUTED UNDER
ARTICLE SEVENTY-EIGHT OF  THE  CIVIL  PRACTICE  LAW  AND  RULES  AT  THE
INSTANCE  OF  THE APPLICANT FOR SUCH LICENSE, THE HOLDER OF A LICENSE SO
REVOKED, SUSPENDED, FINED OR REPRIMANDED.
  18. FOR THE PURPOSE OF THIS ARTICLE, LICENSEES MAY BE HELD RESPONSIBLE
FOR STATEMENTS, REPRESENTATIONS, PROMISES OR ACTS OF THEIR EMPLOYEES  OR
THEIR  AGENTS  WITHIN  THE  SCOPE OF THEIR AUTHORITY; PROVIDED, HOWEVER,
THAT LICENSEES SHALL NOT BE HELD RESPONSIBLE FOR STATEMENTS, REPRESENTA-
TIONS, PROMISES OR ACTS WHICH ARE  CONTRARY  TO  INSTRUCTIONS  OR  WHICH
CONSTITUTE  GROSS  NEGLIGENCE  OR  INTENTIONAL TORTS UNLESS SPECIFICALLY
AUTHORIZED BY THE LICENSEE.
  19. (A) ANY PERSON, FIRM  OR  CORPORATION  THAT  OPERATES  AS  A  DEBT
COLLECTION  AGENCY  WITHOUT  A  LICENSE SHALL BE REQUIRED TO PAY A CIVIL
PENALTY TO THE DEPARTMENT OF NOT MORE  THAN  FIVE  HUNDRED  DOLLARS  PER
ATTEMPT TO COLLECT A DEBT IN VIOLATION OF THIS SECTION.
  (B)  IN  ADDITION TO ANY OTHER PENALTIES, IF A PERSON IS FOUND TO HAVE
COMMITTED REPEATED, MULTIPLE OR PERSISTENT VIOLATIONS OF  ANY  PROVISION
OF  THIS  ARTICLE,  SUCH  PERSON  MAY BE RESPONSIBLE FOR THE COST OF THE
DEPARTMENT'S INVESTIGATION.
  S 604-M. SURETY BONDING REQUIREMENT. 1. AS A CONDITION OF OBTAINING  A
LICENSE PURSUANT TO THIS ARTICLE, EVERY DEBT COLLECTION AGENCY APPLICANT
WHO  IS APPLYING FOR A LICENSE AND EMPLOYS BETWEEN ONE AND FOUR INDIVID-
UALS ENGAGED IN THE COLLECTION OF DEBTS SHALL  OBTAIN  AND  CONTINUE  IN
FULL  FORCE  AND  EFFECT  A  BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE
LETTER OF CREDIT IN THE AMOUNT OF TEN THOUSAND DOLLARS TO BE FILED  WITH
THE SECRETARY.
  2.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS BETWEEN FIVE AND NINE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF
DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,

A. 455                              7

CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
TWENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  3.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS BETWEEN TEN AND TWENTY INDIVIDUALS ENGAGED IN THE COLLECTION  OF
DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
FIFTY THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  4.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
EMPLOYS TWENTY OR MORE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF  DEBTS
SHALL  OBTAIN  AND CONTINUE IN FULL FORCE AND EFFECT A BOND, CONTRACT OF
INDEMNITY,  OR  IRREVOCABLE  LETTER  OF  CREDIT,  IN   THE   AMOUNT   OF
SEVENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
  5.  SUCH  SURETY BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF
CREDIT SHALL BE CONDITIONED THAT THE APPLICANT  WILL  COMPLY  WITH  THIS
ARTICLE, ARTICLE TWENTY-NINE-H, AND ARTICLE TWENTY-NINE-HH OF THIS CHAP-
TER  AND PAY ALL CIVIL PENALTIES, FINES, OR OTHER OBLIGATIONS IMPOSED BY
THE SECRETARY OR A COURT OF LAW,  INVESTIGATORY  COSTS  REQUIRED  TO  BE
PAID,  OR ANY FINAL JUDGMENT AGAINST THE LICENSEE PURSUANT TO SUCH ARTI-
CLES.
  6. THE TOTAL LIABILITY IMPOSED ON THE SURETY BOND UNDER  THIS  SECTION
FOR  ALL BREACHES OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT OF
THE BOND. SUCH LIABILITY IS LIMITED TO THE  AMOUNT  OF  THE  PENALTY  OR
INVESTIGATORY COSTS. IN NO EVENT WILL THE SURETY ON A BOND BE LIABLE FOR
TOTAL  CLAIMS  IN EXCESS OF THE BOND AMOUNT, REGARDLESS OF THE NUMBER OR
NATURE OF CLAIMS MADE AGAINST THE BOND OR THE NUMBER OF YEARS  THE  BOND
REMAINED IN FORCE.
  7. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION AND ANY LICENSEE
SHALL  BE  REQUIRED TO PROVIDE THIRTY DAYS NOTICE TO THE SECRETARY PRIOR
TO THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAILURE TO  MAIN-
TAIN  SUCH  A  BOND  SHALL  OPERATE  TO  REVOKE  THE LICENSE OF THE DEBT
COLLECTION AGENCY UPON NOTICE AND HEARING.
  S 604-N. PENALTIES. 1.  WHEREVER THERE SHALL BE A  VIOLATION  OF  THIS
ARTICLE,  AN APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME
OF THE PEOPLE OF THE STATE OF NEW YORK TO  A  COURT  OR  JUSTICE  HAVING
JURISDICTION  BY  A  SPECIAL PROCEEDING TO ISSUE AN INJUNCTION, AND UPON
NOTICE TO THE DEFENDANT OF  NOT  LESS  THAN  FIVE  DAYS,  TO  ENJOIN  OR
RESTRAIN  THE  CONTINUANCE  OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO
THE SATISFACTION OF THE COURT OR JUSTICE  THAT  THE  DEFENDANT  HAS,  IN
FACT,  VIOLATED  THIS SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT
OR JUSTICE, ENJOINING AND RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT
REQUIRING  PROOF  THAT  ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED
THEREBY. IN ANY SUCH PROCEEDING, THE COURT MAY MAKE  ALLOWANCES  TO  THE
ATTORNEY  GENERAL  AS  PROVIDED  IN  PARAGRAPH SIX OF SUBDIVISION (A) OF
SECTION EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND  RULES,
AND  DIRECT  RESTITUTION.  WHENEVER  THE  COURT  SHALL  DETERMINE THAT A
VIOLATION OF THIS SECTION HAS OCCURRED, THE COURT  MAY  IMPOSE  A  CIVIL
PENALTY  OF NOT LESS THAN ONE HUNDRED DOLLARS NOR MORE THAN TEN THOUSAND
DOLLARS FOR EACH VIOLATION. IN CONNECTION WITH ANY SUCH PROPOSED  APPLI-
CATION,  THE  ATTORNEY  GENERAL  IS  AUTHORIZED TO TAKE PROOF AND MAKE A
DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE
WITH THE CIVIL PRACTICE LAW AND RULES.
  2. ANY PERSON WHO HAS BEEN THE SUBJECT OF AN ATTEMPT TO COLLECT A DEBT
BY A DEBT COLLECTION AGENCY THAT IS NOT LICENSED PURSUANT TO THIS  ARTI-
CLE  MAY  BRING AN ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAWFUL

A. 455                              8

ACT OR PRACTICE, AN ACTION TO RECOVER HIS OR HER ACTUAL DAMAGES OR THREE
THOUSAND FIVE HUNDRED  DOLLARS,  WHICHEVER  IS  GREATER,  OR  BOTH  SUCH
ACTIONS. THE COURT MAY, IN ITS DISCRETION, INCREASE THE AWARD OF DAMAGES
TO  AN  AMOUNT  NOT  TO  EXCEED THREE TIMES THE ACTUAL DAMAGES UP TO TEN
THOUSAND DOLLARS, IF THE COURT FINDS THE  DEFENDANT  WILLFULLY  VIOLATED
THIS  ARTICLE. 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.
  S  604-O.  APPLICABILITY.  1. EXCEPT AS PROVIDED IN SUBDIVISION TWO OF
THIS SECTION, THE PROVISIONS OF THIS ARTICLE  SHALL  EXCLUSIVELY  GOVERN
THE LICENSING OF DEBT COLLECTION AGENCIES NOTWITHSTANDING THE PROVISIONS
OF  ANY  OTHER  LAW  TO  THE CONTRARY AND FURTHER, NO LOCAL LAW SHALL BE
ENACTED WHICH SHALL REQUIRE ANY FEE OR  LICENSE  FOR  THE  LICENSURE  OR
REGISTRATION OF DEBT COLLECTION AGENCIES.
  2.  THE  PROVISIONS OF THIS ARTICLE SHALL NOT BE CONSTRUED TO LIMIT IN
ANY WAY THE AUTHORITY OF A POLITICAL SUBDIVISION TO ENACT, IMPLEMENT AND
CONTINUE TO ENFORCE LOCAL LAWS AND REGULATIONS GOVERNING  THE  LICENSURE
OR REGISTRATION OF DEBT COLLECTION AGENCIES THAT WERE IN EFFECT PRIOR TO
THE  EFFECTIVE  DATE OF THIS ARTICLE, OR TO ENACT, IMPLEMENT AND ENFORCE
ANY AMENDMENTS THERETO.
  S 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
as amended by chapter 458 of the laws of 2012, is  amended  to  read  as
follows:
  (e)  License  to  do  business.  Where the plaintiff's cause of action
against a consumer arises from the plaintiff's  conduct  of  a  business
which is required by state or local law to be licensed by the department
of  consumer affairs of the city of New York, the Suffolk county depart-
ment of consumer affairs, the Westchester county department of  consumer
affairs/weight-measures,  the  county  of Rockland, the county of Putnam
[or], the Nassau county department of consumer affairs OR THE DEPARTMENT
OF  STATE PURSUANT TO ARTICLE TWENTY-NINE-HHH OF  THE  GENERAL  BUSINESS
LAW,  the  complaint  shall allege, as part of the cause of action, that
plaintiff was duly licensed at the time of services rendered  and  shall
contain  the  name  and  number, if any, of such license and the govern-
mental agency which issued such license; provided, however,  that  where
the  plaintiff does not have a license at the commencement of the action
the plaintiff may, subject to the provisions of  rule  [thirty  hundred]
THREE THOUSAND twenty-five of this article, amend the complaint with the
name  and  number  of  an  after-acquired license or the previously held
license, as the case may be, and the name  of  the  governmental  agency
which  issued  such  license or move for leave to amend the complaint in
accordance with such provisions. The failure of the plaintiff to  comply
with  this  subdivision  will permit the defendant to move for dismissal
pursuant to paragraph  seven  of  subdivision  (a)  of  rule  thirty-two
hundred eleven of this chapter.
  S 4. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
necessary for the implementation of this act on its  effective  date  is
authorized  and  directed  to  be  made  and completed on or before such
effective date.