Requires debt collectors to send consumers a written notice of their rights under state law along with their debt collection correspondence

Title of bill

An act to amend the general business law, in relation to debt collection notices

Purpose or general idea of bill

To provide a "Debtor's Bill of Rights" to inform consumers of certain provisions of New York's debt collection practices law.

Summary of specific provisions

This bill would set 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).

Adds a new section 601-a to the general business law and amends section 602 of such law.

Justification

Debt is a fact of many consumer's lives. Some manage their debt without a problem - others do not. Consumers who cannot manage their debt may find themselves the subjects of debt collection. Faced with the inability to payoff a loan or credit card bill, consumers are contacted by creditors as well as professional debt collectors. Abuses have arisen in the debt collection area. Creditors and debt collectors have contacted consumers at work in ways that violate the law; late at night; and through unauthorized third parties. With consumer debt dramatically increasing through the 1980's, these practices proliferated. In fact, there have been reports of debt collectors parking a hearse in front of an individual's home with "A deadbeat lives here" written on it. These and other practices are not only outside the law, they are outrageous and must stop.

An effective way to curb abuses of the law and provide benefits to consumers and businesses is to inform consumers of the limitations placed on debt collectors by New York Law. Consumers deserve to be treated fairly and reasonably, even when they have outstanding debts. At the same time, business benefits from consumers paying their debts.

If debts are not paid, the cost of business increases - harming the business, competition and consumers.

Prior legislative history

2007-2008: A.221 - Passed Assembly 2005-2006: A.614 - advanced to Third Reading 2003-2004: A.3549 - advanced to Third Reading

Fiscal implications

None to the State.

Effective date

First of January next succeeding the date it shall have become law.