S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    584
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2017
                                ___________
 
 Introduced  by  Sen. PERALTA -- 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  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.   The general business law  is  amended  by  adding  a  new
 section 601-a to read as follows:
   §  601-A. DEBT COLLECTION NOTICE TO CONSUMERS.  1. (A) AS USED IN THIS
 SECTION, "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: (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.
   (B)  SUCH  TERM  SHALL  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 WHICH  REGULARLY  ENGAGES
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD00107-01-7

 S. 584                              2
 
 IN  ACTIVITIES  TRADITIONALLY ASSOCIATED WITH DEBT COLLECTION, INCLUDING
 BUT NOT LIMITED TO, SENDING DEMAND LETTERS OR  MAKING  COLLECTION  TELE-
 PHONE 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  NOT
 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 OR INTERNET WEBSITE ESTABLISHED BY THE CONSUMER PROTECTION  DIVI-
 SION  FOR RECEIVING INQUIRIES FROM CONSUMERS).  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

 S. 584                              3
 
 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.
   §  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]
 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.
   §  3. Subdivision 3 of section 94-a of the executive law is amended by
 adding a new paragraph 13-a to read as follows:
   (13-A) ESTABLISH 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 TRADE COMMISSION;
   §  4. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.