LBD02792-01-1
A. 3041 2
300. APPLICABILITY.
§ 295. 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 SUPERINTENDENT;
(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
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.
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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.
§ 296. DEBT COLLECTION AGENCIES. 1. ON OR AFTER MAY FIRST, TWO THOU-
SAND TWENTY-TWO, NO PERSON SHALL ACT AS A DEBT COLLECTION AGENCY WITHOUT
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
ONE YEAR UNLESS SOONER SUSPENDED OR REVOKED. THE SUPERINTENDENT SHALL
ESTABLISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
(B) THE FEE FOR A LICENSE OR RENEWAL THEREOF SHALL BE AS PRESCRIBED
PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER.
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
SUPERINTENDENT MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS
SECTION.
(B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SUPERINTENDENT
SHALL REQUIRE, BUT NOT BE LIMITED TO, THE FOLLOWING INFORMATION, AND
SHALL, AS APPROPRIATE, REQUIRE SUCH INFORMATION NOT ONLY OF THE APPLI-
CANT BUT ALSO OF ANY OF ITS PRINCIPALS, PARTNERS, OFFICERS AND DIREC-
TORS, 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-
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;
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(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 SUPERINTENDENT WITH A SUMMARY OF THE APPLI-
CANT'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
SUPERINTENDENT AS HIS OR HER AGENT UPON WHOM PROCESS OR OTHER NOTIFICA-
TION MAY BE SERVED.
4. IN DETERMINING WHETHER TO ISSUE, RENEW OR SUSPEND A LICENSE, THE
SUPERINTENDENT SHALL CONSIDER THE CHARACTER, COMPETENCY AND INTEGRITY OF
THE APPLICANT. THE SUPERINTENDENT 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 THE GENERAL BUSINESS LAW OR FAILED
TO PAY ANY FINAL CIVIL JUDGMENT RELATING TO WORK AS A DEBT COLLECTION
AGENCY, IF SUCH REFUSAL, IN THE JUDGMENT OF THE SUPERINTENDENT, BEST
PROMOTES THE INTERESTS OF THE PEOPLE OF THIS STATE; OR
(B) VIOLATED ARTICLE TWENTY-NINE-H OF THE GENERAL BUSINESS LAW, THE
FEDERAL FAIR DEBT COLLECTION PRACTICES ACT (15 USC § 1692 ET SEQ.), OR
ANY PROVISION OF THIS ARTICLE.
ALL DETERMINATIONS BY THE SUPERINTENDENT 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
DETERMINED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER.
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.
9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
BLE OR ASSIGNABLE.
10. THE SUPERINTENDENT SHALL ISSUE EACH DEBT COLLECTION AGENCY A
UNIQUE LICENSE NUMBER.
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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 SUPERINTENDENT 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 SUPERINTENDENT, NOT IN
LIMITATION 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 SUPERINTENDENT, SUCH INVESTIGATION OR EXAMINATION IS WARRANTED. EACH
DEBT COLLECTION AGENCY SHALL BE OBLIGED, ON REQUEST OF THE SUPERINTEN-
DENT, 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 SUPERINTENDENT 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 SUPERINTENDENT 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 SUPERINTENDENT MAY DESIGNATE, WHO SHALL
HAVE THE POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON SO
DESIGNATED, 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
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.
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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 SUPERINTENDENT
MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF ANY LICEN-
SEE 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.
§ 297. 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 TWENTY-FIVE THOUSAND DOLLARS TO BE
FILED WITH THE SUPERINTENDENT.
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,
CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT OF
TWENTY-SEVEN THOUSAND FIVE HUNDRED DOLLARS TO BE FILED WITH THE SUPER-
INTENDENT.
3. AS A CONDITION TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
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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-SIX THOUSAND TWO HUNDRED DOLLARS TO BE FILED WITH THE SUPERINTEN-
DENT.
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 SUPERINTENDENT.
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 THE GENER-
AL BUSINESS LAW AND PAY ALL CIVIL PENALTIES, FINES, OR OTHER OBLIGATIONS
IMPOSED BY THE SUPERINTENDENT OR A COURT OF LAW, INVESTIGATORY COSTS
REQUIRED TO BE PAID, OR ANY FINAL JUDGMENT AGAINST THE LICENSEE PURSUANT
TO SUCH ARTICLES.
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 SUPERINTENDENT
PRIOR TO THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAILURE TO
MAINTAIN SUCH A BOND SHALL OPERATE TO REVOKE THE LICENSE OF THE DEBT
COLLECTION AGENCY UPON NOTICE AND HEARING.
§ 298. 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
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
A. 3041 8
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.
§ 299. EXAMINATIONS. 1. EACH LICENSED DEBT COLLECTION AGENCY SHALL
KEEP AND USE IN ITS BUSINESS SUCH BOOKS, ACCOUNTS, AND RECORDS AS WILL
ENABLE THE SUPERINTENDENT TO DETERMINE WHETHER SUCH LICENSEE IS COMPLY-
ING WITH THE PROVISIONS OF THIS ARTICLE AND WITH THE RULES AND REGU-
LATIONS PROMULGATED HEREUNDER. EVERY LICENSED DEBT COLLECTION AGENCY
SHALL PRESERVE SUCH BOOKS, ACCOUNTS, AND RECORDS, FOR AT LEAST FIVE
YEARS AFTER MAKING THE FINAL ENTRY REGARDING A CONSUMER DEBT. PRESERVA-
TION OF PHOTOGRAPHIC REPRODUCTION THEREOF OR RECORDS IN PHOTOGRAPHIC
FORM, INCLUDING AN OPTICAL DISK STORAGE SYSTEM AND THE USE OF ELECTRONIC
DATA PROCESSING EQUIPMENT THAT PROVIDES COMPARABLE RECORDS TO THOSE
OTHERWISE REQUIRED AND WHICH ARE AVAILABLE FOR EXAMINATION UPON REQUEST
SHALL CONSTITUTE COMPLIANCE WITH THE REQUIREMENTS OF THIS SECTION.
2. EACH LICENSED DEBT COLLECTION AGENCY SHALL ANNUALLY, ON OR BEFORE
APRIL FIRST, FILE A REPORT WITH THE SUPERINTENDENT GIVING SUCH INFORMA-
TION AS THE SUPERINTENDENT MAY REQUIRE CONCERNING THE BUSINESS AND OPER-
ATIONS DURING THE PRECEDING CALENDAR YEAR OF EACH LICENSED PLACE OF
BUSINESS CONDUCTED BY SUCH LICENSED DEBT COLLECTION AGENCY WITHIN THE
STATE UNDER AUTHORITY OF THIS ARTICLE. SUCH REPORT SHALL BE SUBSCRIBED
AND AFFIRMED AS TRUE BY THE LICENSED DEBT COLLECTION AGENCY UNDER THE
PENALTIES OF PERJURY AND SHALL BE IN THE FORM PRESCRIBED BY THE SUPER-
INTENDENT.
3. IN ADDITION TO ANNUAL REPORTS, THE SUPERINTENDENT MAY REQUIRE SUCH
ADDITIONAL REGULAR OR SPECIAL REPORTS AS MAY BE DEEMED NECESSARY TO THE
PROPER SUPERVISION OF A LICENSED DEBT COLLECTION AGENCY UNDER THIS ARTI-
CLE. SUCH ADDITIONAL REPORTS SHALL BE IN THE FORM PRESCRIBED BY THE
SUPERINTENDENT AND SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE UNDER THE
PENALTIES OF PERJURY.
4. THE EXPENSES OF EVERY EXAMINATION OF THE AFFAIRS OF A LICENSED DEBT
COLLECTION AGENCY SUBJECT TO THIS SECTION SHALL BE BORNE AND PAID BY THE
LICENSED DEBT COLLECTION AGENCY.
§ 300. 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.
§ 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
as amended by chapter 693 of the laws of 2019, 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 county of Rockland, the county of Putnam,
the county of Westchester, [or] the Nassau county department of consumer
A. 3041 9
affairs OR THE DEPARTMENT OF FINANCIAL SERVICES PURSUANT TO ARTICLE
SEVEN OF THE BANKING 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 governmental agency which issued such license. The fail-
ure of the plaintiff to comply with this subdivision will permit the
defendant to move for dismissal pursuant to paragraph seven of subdivi-
sion (a) of rule thirty-two hundred eleven of this chapter.
§ 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 are
authorized to be made and completed on or before such effective date.