In certain actions arising out of a consumer credit transaction the complaint should include the last four digits of the number assigned to the credit card

BILL NUMBER:S8099

Title of bill

An act to amend the civil practice law and rules, in relation to consumer credit actions

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Local Courts Advisory Committee.

This measure amends CPLR 3016 to require that a complaint in an action arising out of a consumer credit transaction plead the last four digits of the account number of the credit card used to incur the consumer debt at issue in the action.

Under the CPLR, a "consumer credit transaction" is defined as "a transaction wherein credit is extended to an individual and the money, property, or service which is the subject of the transaction is primarily for personal, family, or household purposes." CPLR 105(f).

Where the action arising out of a consumer credit transaction involves a credit card, resolution of the dispute and satisfaction of the outstanding debt raises the issue of closure. Because credit card debt is sold to third parties and commonly to several debt collectors serially, it often is impossible for a debtor to identify if the debt is valid or who the original creditor is. It is, therefore, not uncommon to find a debtor being sued by different debt collectors for the same debt. In addition, credit card numbers are changed by the original creditor or debt purchaser so that it appears that there may be more than one credit card issued to the debtor. As a result, a debtor who pays off a claim against the original card number will often find that he or she has a "second" card that needs to be paid.

By requiring that the last four digits of the account number of the original credit card be pled in the complaint, the consumer-debtor would be able to verify the obligation and have proof of payment when the debt is satisfied. Moreover, by having part of the account number in the complaint, the court can insist that any stipulation of settlement of the action contain that information and prevent creditors from suing on the same debt twice. This measure restricts the use of the credit account number to the last four digits in order provide enough information to obtain closure but not so much information as to make the consumer-debtor vulnerable to identity theft.

This measure, which would have no fiscal impact upon the State, would take effect on the first day of January after becoming a law and apply in actions commenced on or after such date.

2010 LEGISLATIVE HISTORY:

None. New proposal.