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

BILL NUMBER:S73 REVISED 01/09/12

Title of bill

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

Purpose

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

Summary of 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). Such notice will also be required to contain contact information for the New York State Consumer Protection Board and the Attorney General's Office.

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.

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.

Legislative history

2011: S.73 - Referred to Consumer Protection 2010: S.7303-A/A.271-B - Reported and Committed to Codes 2007-08: A.221 - Passed Assembly 2005-06: A.614 - Advanced to Third Reading 2003-04: 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.