What's happening
This bill allows debtors to sue for damages, punitive damages, and attorney fees for improper debt collection practices in New York.
Why it matters
Empowers individuals. By granting a private right of action, the bill enables New Yorkers to directly sue debt collectors who violate debt collection laws, rather than relying solely on government enforcement.
Deters abusive practices. The prospect of owing punitive damages and the plaintiff's attorney’s fees creates a stronger financial deterrent against improper or illegal debt collection tactics.
Levels the legal playing field. Allowing recovery of attorney’s fees makes it feasible for lower-income individuals to pursue claims, increasing access to justice for those harmed by abusive collectors.
Potentially raises compliance costs. Debt collectors operating in New York would likely need to improve their practices and training to avoid lawsuits, which could affect how debt collection is conducted in the state.
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Who cares
Headline styles
Let Debtors Sue Collectors
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Referred to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Let Debtors Sue Collectors
Assembly Floor Calendar · Sponsor Aravella Simotas
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3101
2017-2018 Regular Sessions
IN SENATE
January 19, 2017
Introduced by Sens. GIANARIS, KRUEGER -- 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, in relation to allowing a private right of action for improper debt collection
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 602 of the general business law is amended by adding a new subdivision 4 to read as follows:
4. A debtor shall have a private right of action against any person or persons in violation of this article. Such person or persons shall be liable to the debtor for any actual damages the debtor sustained as a result of the violation of this article, any punitive damages awarded by the court, and reasonable attorney's fees.
§ 2. This act shall take effect on the thirtieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04145-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to allowing a private right of action for improper debt collection
Summary of specific provisions
This bill amends section 602 of the general business law, adding a new subdivision 4, to create a private right of action for a debtor for improper debt collection procedures based on the following: 1. Any person who violates this article shall be guilty of a misdemeanor, and each violation shall be a separate offense. 2. A debtor can bring a private right of action for violations of this article. The person shall be liable to the debtor for any actual damages the debtor sustained as a result of the violation of the article.
Justification
This bill adds significant new protection to debtors in this state. It expressly provides for a private right of action in debt collection cases. Given that a private right of action was not expressly provided for in article 29-H of the General Business Law, which regulates debt collection practices, intermediate state courts decided the issue with varying results. In I.F.C. PERSONAL MONEY MANAGERS V. VADNEY, 133 Misc. 2d 841, 508 N.Y.S. 2d 845 (Sup. 1986), and KOHLER V. FORD MOTOR CREDIT CO., 112 Misc. 2d 480, 447 N.Y.S. 2d 215, a private right of action was found where creditors employed improper debt collection practices. However, in LANE V. MARINE MIDLAND BANK, 112 Misc. 2d 200, 446 N.Y.S. 2d 873, the court held that there is no private right of action in debt collection cases. A private right of action could arguably have been brought in debt collection actions under different provisions of the General Business Law. However, the New York Court of Appeals in VARELA V. INVESTORS INSURANCE HOLDING CORP., 81 N.Y. 2d 958, 598 N.Y.S. 2d 761 (1993), definitively settled the issue. This bill overrules the VARELA decision wherein the Court held that article 29-H of the General Business Law, which regulates debt collection practices, does not create a private tight of action but authorizes only the District Attorney and the Attorney General to commence an action for violation of its provision. The Court's rationale was based on the Legislature's failure to expressly provide for a private right of action in this article, while providing for such in other provisions. Presently, debtors are being harassed by creditors through their friends and relatives and also at their work place. Creditors are also using scare tactics towards the children of the debtors as a means of a collection procedure. As a result, many children become afraid of being homeless or having their parents taken away from them. On the other hand, some debtors are faced with losing their jobs because they are receiving too many harassing phone calls at their work place. Creditors continue to harass debtors by any means necessary, because they can get away with it. This bill shall reduce the frequency of harassment: by creditors towards debtors by expressly creating a private right of action and imposing fines for improper debt collection procedures.
Legislative history
2016: Died in Consumer Protection
2015: Died in Consumer Protection
2014: Senate Bill 570 (Gianaris) - Died in Senate Consumer Protection Committee
2012: Senate Bill 423B-A (Gianaris) - Died in Senate Consumer Protection Committee 2012: Assembly Bill 6674-A (Jeffries) - Passed Assembly 91-51 (6/20/11)
Effective date
This act shall take effect on the thirtieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.