S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          190
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                      (PREFILED)
                                    January 7, 2015
                                      ___________
       Introduced  by Sen. SQUADRON -- 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 and the civil practice law  and
         rules, in relation to debt collection agencies
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Legislative intent. The legislature hereby finds the  pres-
    2  ence  of consumer-related problems with respect to the practices of debt
    3  collection agencies. Federal and state laws regulate how debt collectors
    4  may communicate with debtors and prohibit the use of  certain  threaten-
    5  ing,  deceptive  and  unfair  collection  practices. Despite these legal
    6  protections, the number of consumer complaints regarding debt collection
    7  practices continue to rise. Consumer complaints received by the  Federal
    8  Trade  Commission  regarding  third-party  debt  collectors grew for the
    9  thirteenth consecutive year  in  2010,  and  consumers  filed  with  the
   10  Commission  more  complaints against third-party collectors than against
   11  any other specific industry. While the majority of those engaged in  the
   12  business  of  debt  collection are honest and ethical in their dealings,
   13  there is a minority of unscrupulous  collection  agencies  in  operation
   14  that practice abusive tactics. Due to the sensitive nature of the infor-
   15  mation  used  in  the course of such agency's everyday business, and the
   16  vulnerable position consumers find themselves in when dealing with these
   17  agencies, it is incumbent upon this legislature to  protect  the  inter-
   18  ests,  reputations  and  fiscal well-being of the citizens of this state
   19  against those agencies who would abuse  their  privilege  of  operation.
   20  Therefore,  it  is  herein  declared  that the state should license debt
   21  collection agencies.
   22    S 2. The general business law is  amended  by  adding  a  new  article
   23  29-HHH to read as follows:
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD01068-01-5
       S. 190                              2
    1                               ARTICLE 29-HHH
    2                          DEBT COLLECTION AGENCIES
    3  SECTION 604-K. DEFINITIONS.
    4          604-L. DEBT COLLECTION AGENCIES.
    5          604-M. SURETY BONDING REQUIREMENT.
    6          604-N. PENALTIES.
    7          604-O. APPLICABILITY.
    8    S  604-K.  DEFINITIONS.  AS  USED IN THIS ARTICLE, THE FOLLOWING TERMS
    9  SHALL HAVE THE FOLLOWING MEANINGS:
   10    1. (A) "DEBT COLLECTION AGENCY" SHALL MEAN A PERSON,  FIRM  OR  CORPO-
   11  RATION  ENGAGED  IN BUSINESS, THE PRINCIPAL PURPOSE OF WHICH IS TO REGU-
   12  LARLY COLLECT OR ATTEMPT TO COLLECT DEBTS OWED OR DUE OR ASSERTED TO  BE
   13  OWED OR DUE TO ANOTHER AND SHALL ALSO INCLUDE A BUYER OF DELINQUENT DEBT
   14  WHO  SEEKS  TO COLLECT SUCH DEBT EITHER DIRECTLY OR THROUGH THE SERVICES
   15  OF ANOTHER BY, INCLUDING BUT NOT LIMITED TO, INITIATING OR  USING  LEGAL
   16  PROCESSES OR OTHER MEANS TO COLLECT OR ATTEMPT TO COLLECT SUCH DEBT.
   17    (B) THE TERM DOES NOT INCLUDE: (I) ANY OFFICER OR EMPLOYEE OF A CREDI-
   18  TOR WHILE, IN THE NAME OF THE CREDITOR, COLLECTING DEBTS FOR SUCH CREDI-
   19  TOR;
   20    (II) ANY OFFICER OR EMPLOYEE OF A DEBT COLLECTION AGENCY;
   21    (III)  ANY PERSON WHILE ACTING AS A DEBT COLLECTION AGENCY FOR ANOTHER
   22  PERSON, BOTH OF WHOM ARE RELATED BY COMMON OWNERSHIP  OR  AFFILIATED  BY
   23  CORPORATE CONTROL, IF THE PERSON ACTING AS A DEBT COLLECTION AGENCY DOES
   24  SO  ONLY  FOR  PERSONS TO WHOM IT IS SO RELATED OR AFFILIATED AND IF THE
   25  PRINCIPAL BUSINESS OF SUCH PERSON IS NOT THE COLLECTION OF DEBTS;
   26    (IV) ANY PERSON WHILE SERVING OR ATTEMPTING TO SERVE LEGAL PROCESS  ON
   27  ANY  OTHER  PERSON  IN  CONNECTION  WITH THE JUDICIAL ENFORCEMENT OF ANY
   28  DEBT;
   29    (V) ANY ATTORNEY-AT-LAW OR LAW FIRM COLLECTING A DEBT IN SUCH CAPACITY
   30  ON BEHALF OF AND IN THE NAME OF A CLIENT SOLELY THROUGH ACTIVITIES  THAT
   31  MAY   ONLY   BE   PERFORMED   BY   A  LICENSED  ATTORNEY,  BUT  NOT  ANY
   32  ATTORNEY-AT-LAW OR LAW FIRM OR PART THEREOF  WHO  REGULARLY  ENGAGES  IN
   33  ACTIVITIES  TRADITIONALLY  PERFORMED  BY DEBT COLLECTORS, INCLUDING, BUT
   34  NOT LIMITED TO, CONTACTING A DEBTOR THROUGH THE MAIL  OR  VIA  TELEPHONE
   35  WITH  THE PURPOSE OF COLLECTING A DEBT OR OTHER ACTIVITIES AS DETERMINED
   36  BY RULE OF THE SECRETARY;
   37    (VI) ANY PERSON EMPLOYED BY A UTILITY REGULATED UNDER  THE  PROVISIONS
   38  OF THE PUBLIC SERVICE LAW, ACTING FOR SUCH UTILITY;
   39    (VII)  ANY PERSON COLLECTING OR ATTEMPTING TO COLLECT ANY DEBT OWED OR
   40  DUE OR ASSERTED TO BE OWED OR DUE ANOTHER TO THE EXTENT  SUCH  ACTIVITY:
   41  (A)  IS  INCIDENTAL  TO  A BONA FIDE FIDUCIARY OBLIGATION OR A BONA FIDE
   42  ESCROW AGREEMENT; (B) CONCERNS A  DEBT  WHICH  WAS  ORIGINATED  BY  SUCH
   43  PERSON;  OR  (C) CONCERNS A DEBT WHICH WAS NOT IN DEFAULT AT THE TIME IT
   44  WAS OBTAINED BY SUCH PERSON AS A SECURED PARTY IN  A  COMMERCIAL  CREDIT
   45  TRANSACTION INVOLVING THE CREDITOR;
   46    (VIII) ANY OFFICER OR EMPLOYEE OF THE UNITED STATES, ANY STATE THEREOF
   47  OR  ANY POLITICAL SUBDIVISION OF ANY STATE TO THE EXTENT THAT COLLECTING
   48  OR ATTEMPTING TO COLLECT ANY DEBT OWED IS IN THE PERFORMANCE OF  HIS  OR
   49  HER OFFICIAL DUTIES;
   50    (IX)  ANY  NON-PROFIT ORGANIZATION WHICH, AT THE REQUEST OF CONSUMERS,
   51  PERFORMS BONA FIDE CONSUMER CREDIT COUNSELING AND ASSISTS  CUSTOMERS  IN
   52  THE LIQUIDATION OF THEIR DEBTS BY RECEIVING PAYMENTS FROM SUCH CUSTOMERS
   53  AND DISTRIBUTING SUCH AMOUNTS TO CREDITORS; OR
   54    (X) ANY PERSON, FIRM OR CORPORATION ENGAGED IN BUSINESS, THE PRINCIPAL
   55  PURPOSE  OF  WHICH  IS  TO REGULARLY COLLECT OR ATTEMPT TO COLLECT DEBTS
   56  OWED OR DUE OR ASSERTED TO BE OWED OR DUE TO ANOTHER  PERSON  WHERE  THE
       S. 190                              3
    1  DEBT  IS  ENFORCED  FOR  CHILD  SUPPORT, SPOUSAL SUPPORT, MAINTENANCE OR
    2  ALIMONY, PROVIDED, HOWEVER, THAT IF SUCH  PERSON,  FIRM  OR  CORPORATION
    3  ALSO  REGULARLY  COLLECTS  OR ATTEMPTS TO COLLECT DEBTS OTHER THAN THOSE
    4  ENFORCED  FOR  CHILD  SUPPORT,  SPOUSAL SUPPORT, MAINTENANCE OR ALIMONY,
    5  SUCH PERSON MUST COMPLY WITH THE REQUIREMENTS OF THIS ARTICLE.
    6    2. "CONSUMER" MEANS ANY NATURAL PERSON OBLIGATED  OR  ALLEGEDLY  OBLI-
    7  GATED TO PAY ANY DEBT.
    8    3.  "DEBT" MEANS ANY OBLIGATION OR ALLEGED OBLIGATION OF A CONSUMER TO
    9  PAY MONEY ARISING OUT OF A TRANSACTION IN  WHICH  THE  MONEY,  PROPERTY,
   10  INSURANCE,  OR  SERVICES  WHICH  ARE  THE SUBJECT OF THE TRANSACTION ARE
   11  PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES,  WHETHER  OR  NOT
   12  SUCH OBLIGATION HAS BEEN REDUCED TO JUDGMENT.
   13    4. "DEPARTMENT" MEANS THE DEPARTMENT OF STATE.
   14    5. "DIVISION" MEANS THE DIVISION OF CRIMINAL JUSTICE SERVICES.
   15    6. "SECRETARY" MEANS THE SECRETARY OF STATE.
   16    S  604-L.  DEBT COLLECTION AGENCIES. 1. ON OR AFTER OCTOBER FIRST, TWO
   17  THOUSAND SIXTEEN, NO PERSON SHALL ACT AS A DEBT COLLECTION AGENCY  WITH-
   18  OUT FIRST HAVING OBTAINED A LICENSE IN ACCORDANCE WITH THE PROVISIONS OF
   19  THIS  ARTICLE,  AND  WITHOUT  FIRST  BEING  IN COMPLIANCE WITH ALL OTHER
   20  APPLICABLE LAWS, RULES AND REGULATIONS.
   21    2. (A) ALL LICENSES ISSUED PURSUANT TO THIS ARTICLE SHALL BE VALID FOR
   22  TWO YEARS UNLESS SOONER SUSPENDED OR REVOKED. THE SECRETARY SHALL ESTAB-
   23  LISH BY REGULATION THE EXPIRATION DATE OF SUCH LICENSES.
   24    (B) THE FEE FOR A LICENSE OR RENEWAL THEREOF  SHALL  BE  FIVE  HUNDRED
   25  DOLLARS.
   26    3.  (A)  EACH  PERSON APPLYING FOR A DEBT COLLECTION AGENCY LICENSE OR
   27  RENEWAL THEREOF SHALL FILE AN APPLICATION IN SUCH FORM AND DETAIL AS THE
   28  SECRETARY MAY PRESCRIBE AND SHALL PAY THE FEE REQUIRED BY THIS SECTION.
   29    (B) IN ADDITION TO ANY OTHER INFORMATION REQUIRED, THE SECRETARY SHALL
   30  REQUIRE THE FOLLOWING INFORMATION, AND SHALL,  AS  APPROPRIATE,  REQUIRE
   31  SUCH  INFORMATION NOT ONLY OF THE APPLICANT BUT ALSO OF ANY OF ITS PRIN-
   32  CIPALS, PARTNERS, OFFICERS  AND  DIRECTORS,  OR  ANY  PERSON  OR  ENTITY
   33  CONTROLLING AN INTEREST GREATER THAN TEN PERCENT:
   34    (I) THE NAME AND RESIDENCE ADDRESS OF THE APPLICANT;
   35    (II) THE BUSINESS NAME, IF OTHER THAN APPLICANT;
   36    (III)  THE PLACE, INCLUDING THE CITY, TOWN OR VILLAGE, WITH THE STREET
   37  AND NUMBER, WHERE THE BUSINESS IS TO BE LOCATED;
   38    (IV) THE BUSINESS TELEPHONE OF THE APPLICANT;
   39    (V) THE LENGTH OF TIME THAT THE APPLICANT HAS BEEN A  DEBT  COLLECTION
   40  AGENCY;
   41    (VI) A STATEMENT INDICATING WHETHER THE APPLICANT HAS:
   42    (A)  BEEN  CONVICTED  OF  ANY CRIME OR IS A DEBTOR ON ANY UNPAID CIVIL
   43  JUDGMENT RELATING TO WORK AS A DEBT COLLECTION AGENCY; AND
   44    (B) AT ANY TIME IN THE PAST BEEN ISSUED A  LICENSE  PURSUANT  TO  THIS
   45  ARTICLE,  OR HAS BEEN ISSUED A LICENSE FOR DEBT COLLECTION ACTIVITIES BY
   46  ANY OTHER STATE OR LOCAL AUTHORITY, AND IF SO, WHETHER SUCH LICENSE  WAS
   47  EVER REVOKED OR SUSPENDED;
   48    (VII)  A  DETAILED  DESCRIPTION  OF  THE BUSINESS PRACTICES OR METHODS
   49  USED, OR INTENDED TO BE USED, BY THE APPLICANT TO CONFIRM  THE  VALIDITY
   50  OF THE DEBTS IT SEEKS TO COLLECT FROM CONSUMERS;
   51    (VIII)  A SUMMARY OF THE APPLICANT'S RECORD-KEEPING POLICY, INCLUDING,
   52  BUT NOT LIMITED TO:
   53    (A) THE LENGTH OF TIME THE APPLICANT MAINTAINS, OR  INTENDS  TO  MAIN-
   54  TAIN, RECORDS PERTAINING TO CONSUMERS; AND
   55    (B)  THE  MANNER IN WHICH THE APPLICANT RECORDS AND STORES, OR INTENDS
   56  TO RECORD AND STORE: CONSUMER CHALLENGES TO THE VALIDITY OF DEBT;  BILL-
       S. 190                              4
    1  ING ERRORS; PAYMENTS MADE BY A CONSUMER; SETTLEMENT AGREEMENTS; INFORMA-
    2  TION  REGARDING  PARTIES  RESPONSIBLE FOR DEBT; ANY STATEMENTS MADE BY A
    3  CONSUMER ALLEGING THAT THE DEBT  AROSE  FROM  IDENTITY  THEFT;  AND  ANY
    4  STATEMENTS  MADE BY A CONSUMER STATING THAT THE CONSUMER RECEIVED STATU-
    5  TORILY EXEMPT INCOME AS DEFINED IN SECTION FIFTY-TWO HUNDRED  TWENTY-TWO
    6  OF THE CIVIL PRACTICE LAW AND RULES;
    7    (IX) WHETHER THE APPLICANT REGULARLY SELLS, OR INTENDS TO SELL, DEBTS.
    8  IF  THE  APPLICANT SELLS, OR INTENDS TO SELL DEBTS, SUCH APPLICANT SHALL
    9  BE REQUIRED TO PROVIDE THE SECRETARY WITH A SUMMARY OF  THE  APPLICANT'S
   10  POLICY  WITH  RESPECT  TO THE INFORMATION REGARDING A CONSUMER'S ACCOUNT
   11  THAT IT TRANSMITS, OR WILL TRANSMIT, TO THE PURCHASER OF A DEBT; AND
   12    (X) A SWORN STATEMENT BY THE APPLICANT THAT THE INFORMATION SET  FORTH
   13  IN THE APPLICATION IS CURRENT AND ACCURATE.
   14    (C)  AN APPLICANT WHO IS A NON-RESIDENT OF THE STATE SHALL PROVIDE THE
   15  NAME AND ADDRESS OF A REGISTERED AGENT WITHIN THE STATE OR DESIGNATE THE
   16  SECRETARY AS HIS OR HER AGENT UPON WHOM PROCESS  OR  OTHER  NOTIFICATION
   17  MAY BE SERVED.
   18    4.  IN  DETERMINING WHETHER TO ISSUE OR RENEW A LICENSE, THE SECRETARY
   19  SHALL CONSIDER THE CHARACTER, COMPETENCY AND INTEGRITY OF THE APPLICANT.
   20  THE SECRETARY MAY REFUSE TO ISSUE OR RENEW A LICENSE TO ANY PERSON, FIRM
   21  OR CORPORATION WHOM HE OR SHE FINDS HAS: (A) BEEN CONVICTED OF ANY CRIME
   22  DEFINED IN ARTICLE ONE HUNDRED FIFTY-FIVE OF THE PENAL  LAW  OR  ARTICLE
   23  TWENTY-TWO-A  OF  THIS CHAPTER OR FAILED TO PAY ANY FINAL CIVIL JUDGMENT
   24  RELATING TO WORK AS A DEBT COLLECTION AGENCY, IF SUCH  REFUSAL,  IN  THE
   25  JUDGMENT  OF THE SECRETARY, BEST PROMOTES THE INTERESTS OF THE PEOPLE OF
   26  THIS STATE; OR
   27    (B) VIOLATED ARTICLE TWENTY-NINE-H OF THIS CHAPTER OR THE FEDERAL FAIR
   28  DEBT COLLECTION PRACTICES ACT (15 USC S 1692 ET SEQ.).
   29    ALL DETERMINATIONS BY THE SECRETARY TO ISSUE OR RENEW A LICENSE  SHALL
   30  BE  MADE  IN  ACCORDANCE WITH SUBDIVISION SIXTEEN OF SECTION TWO HUNDRED
   31  NINETY-SIX OF THE  EXECUTIVE  LAW  AND  ARTICLE  TWENTY-THREE-A  OF  THE
   32  CORRECTION LAW.
   33    5.  NOTICE IN WRITING IN THE MANNER AND FORM PRESCRIBED BY THE DEPART-
   34  MENT SHALL BE GIVEN TO THE DEPARTMENT AT ITS OFFICES  IN  ALBANY  WITHIN
   35  TEN DAYS OF CHANGES OF NAME OR ADDRESS BY LICENSED DEBT COLLECTION AGEN-
   36  CIES.  THE FEE FOR FILING EACH CHANGE OF NAME OR ADDRESS NOTICE SHALL BE
   37  TEN DOLLARS.
   38    6. THE FEES ESTABLISHED BY THIS SECTION SHALL NOT BE REFUNDABLE.
   39    7.  EACH  DEBT  COLLECTION  AGENCY  ENGAGED  IN COLLECTING DEBTS SHALL
   40  COMMUNICATE HIS OR HER LICENSE NUMBER UPON THE REQUEST OF ANY INTERESTED
   41  PARTY. ANY ADVERTISEMENT, LETTERHEAD, RECEIPT OR OTHER PRINTED MATTER OF
   42  A LICENSEE MUST CONTAIN THE LICENSE NUMBER ASSIGNED TO THE  LICENSEE  BY
   43  THE  DEPARTMENT.  SUCH LICENSE NUMBER SHALL BE CLEARLY AND CONSPICUOUSLY
   44  DISPLAYED.
   45    8. NO PERSON, FIRM OR CORPORATION SHALL: (A) PRESENT,  OR  ATTEMPT  TO
   46  PRESENT, AS HIS, HER OR ITS OWN, THE LICENSE NUMBER OF ANOTHER;
   47    (B)  KNOWINGLY GIVE FALSE EVIDENCE OF A MATERIAL NATURE TO THE DEPART-
   48  MENT FOR THE PURPOSE OF PROCURING A LICENSE;
   49    (C) FALSELY REPRESENT THEMSELVES TO  BE  A  LICENSED  DEBT  COLLECTION
   50  AGENCY;
   51    (D) USE OR ATTEMPT TO USE A LICENSE WHICH HAS EXPIRED;
   52    (E) OFFER TO PERFORM OR PERFORM ANY COLLECTION OF DEBTS WITHOUT HAVING
   53  A CURRENT LICENSE AS IS REQUIRED UNDER THIS ARTICLE; OR
   54    (F)  REPRESENT  IN ANY MANNER THAT HIS, HER OR ITS LICENSE CONSTITUTES
   55  AN ENDORSEMENT OF THE QUALITY OF WORKMANSHIP OR COMPETENCY OF  THE  DEBT
   56  COLLECTION AGENCY.
       S. 190                              5
    1    9. LICENSES ISSUED TO DEBT COLLECTION AGENCIES SHALL NOT BE TRANSFERA-
    2  BLE OR ASSIGNABLE.
    3    10.  THE  SECRETARY  SHALL  ISSUE EACH DEBT COLLECTION AGENCY A UNIQUE
    4  LICENSE NUMBER.
    5    11. THE DEPARTMENT SHALL  MAINTAIN  AND  PUBLISH  A  REGISTRY  OF  ALL
    6  LICENSED  DEBT  COLLECTION  AGENCIES, WHICH SHALL LIST AND IDENTIFY, ALL
    7  LICENSED DEBT COLLECTION AGENCIES DOING  BUSINESS  IN  THIS  STATE.  THE
    8  DEPARTMENT SHALL MAKE THE REGISTRY AVAILABLE ON ITS WEBSITE.
    9    12.  (A) THE SECRETARY SHALL ADOPT SUCH RULES AND REGULATIONS AS HE OR
   10  SHE MAY DETERMINE ARE NECESSARY FOR THE ADMINISTRATION  AND  ENFORCEMENT
   11  OF   THIS  ARTICLE,  AND  SHALL  PROVIDE  WRITTEN  NOTIFICATION  OF  THE
   12  PROVISIONS OF THIS ARTICLE TO  ALL  DEBT  COLLECTION  AGENCIES  LICENSED
   13  PURSUANT TO THIS ARTICLE.
   14    (B)  IN  ADDITION TO ANY OTHER POWERS OF THE SECRETARY, NOT IN LIMITA-
   15  TION THEREOF, HE OR SHE SHALL HAVE THE POWER TO ENFORCE  THE  PROVISIONS
   16  OF  THIS  ARTICLE,  TO INVESTIGATE ANY VIOLATION THEREOF, TO INVESTIGATE
   17  THE BUSINESS, BUSINESS  PRACTICES  AND  BUSINESS  METHODS  OF  ANY  DEBT
   18  COLLECTION  AGENCY, AND TO CONDUCT ROUTINE EXAMINATIONS OF THE FINANCIAL
   19  SOLVENCY OF ANY DEBT COLLECTION AGENCY, IF IN THE OPINION OF THE  SECRE-
   20  TARY,   SUCH  INVESTIGATION  OR  EXAMINATION  IS  WARRANTED.  EACH  DEBT
   21  COLLECTION AGENCY SHALL BE OBLIGED,  ON  REQUEST  OF  THE  SECRETARY  OF
   22  STATE,  TO  SUPPLY  SUCH INFORMATION, BOOKS, PAPERS OR RECORDS AS MAY BE
   23  REQUIRED CONCERNING HIS, HER OR  ITS  BUSINESS,  BUSINESS  PRACTICES  OR
   24  BUSINESS  METHODS, OR PROPOSED BUSINESS PRACTICES OR METHODS. FAILURE TO
   25  COMPLY WITH A LAWFUL REQUEST OF THE SECRETARY  SHALL  BE  A  GROUND  FOR
   26  DENYING  AN  APPLICATION  FOR A LICENSE, OR FOR REVOKING, SUSPENDING, OR
   27  FAILING TO RENEW A LICENSE  ISSUED UNDER THIS ARTICLE.
   28    (C) THE DEPARTMENT SHALL HAVE THE  POWER  TO  REVOKE  OR  SUSPEND  ANY
   29  LICENSE,  OR  IN LIEU THEREOF TO IMPOSE A FINE NOT LESS THAN ONE HUNDRED
   30  DOLLARS NOR MORE THAN TWO THOUSAND DOLLARS PER  VIOLATION  OR  INSTANCE,
   31  PAYABLE TO THE DEPARTMENT, OR REPRIMAND ANY LICENSEE OR DENY AN APPLICA-
   32  TION FOR A LICENSE OR RENEWAL THEREOF UPON PROOF:
   33    (I)  THAT THE APPLICANT OR LICENSEE HAS VIOLATED ANY OF THE PROVISIONS
   34  OF THIS ARTICLE OR THE RULES AND  REGULATIONS  PROMULGATED  PURSUANT  TO
   35  THIS ARTICLE;
   36    (II)  THAT  THE  APPLICANT  OR LICENSEE HAS PRACTICED FRAUD, DECEIT OR
   37  MISREPRESENTATION;
   38    (III) THAT THE APPLICANT OR LICENSEE HAS MADE A MATERIAL  MISSTATEMENT
   39  IN THE APPLICATION FOR OR RENEWAL OF HIS OR HER LICENSE; OR
   40    (IV)  THAT  THE APPLICANT OR LICENSEE HAS DEMONSTRATED INCOMPETENCE OR
   41  UNTRUSTWORTHINESS IN HIS OR HER ACTIONS.
   42    13. THE DEPARTMENT SHALL BEFORE DENYING AN APPLICATION FOR  A  LICENSE
   43  OR  BEFORE  REVOKING  OR SUSPENDING ANY LICENSE, OR IMPOSING ANY FINE OR
   44  REPRIMAND, AND AT LEAST FIFTEEN DAYS PRIOR TO THE DATE SET FOR THE HEAR-
   45  ING, AND UPON DUE NOTICE TO THE COMPLAINANT OR OBJECTOR, NOTIFY IN WRIT-
   46  ING THE APPLICANT, OR THE HOLDER OF SUCH LICENSE, OF ANY CHARGE MADE AND
   47  SHALL AFFORD SUCH APPLICANT OR LICENSEE AN OPPORTUNITY TO  BE  HEARD  IN
   48  PERSON  OR  BY  COUNSEL IN REFERENCE THERETO. SUCH WRITTEN NOTICE MAY BE
   49  SERVED PERSONALLY TO THE APPLICANT OR LICENSEE, OR BY CERTIFIED MAIL  TO
   50  THE LAST KNOWN BUSINESS ADDRESS OF SUCH APPLICANT OR LICENSEE.
   51    14. THE HEARING ON SUCH CHARGES SHALL BE AT SUCH TIME AND PLACE AS THE
   52  DEPARTMENT  SHALL  PRESCRIBE  AND  SHALL BE CONDUCTED BY SUCH OFFICER OR
   53  PERSON IN THE DEPARTMENT AS THE SECRETARY MAY DESIGNATE, WHO SHALL  HAVE
   54  THE  POWER TO SUBPOENA AND BRING BEFORE THE OFFICER, OR PERSON SO DESIG-
   55  NATED, ANY PERSON IN THIS STATE AND  ADMINISTER  AN  OATH  TO  AND  TAKE
   56  TESTIMONY  OF  ANY  PERSON OR CAUSE HIS OR HER DEPOSITION TO BE TAKEN. A
       S. 190                              6
    1  SUBPOENA ISSUED UNDER THIS SECTION SHALL BE REGULATED BY THE CIVIL PRAC-
    2  TICE LAW AND RULES. SUCH OFFICER OR PERSON IN THE DEPARTMENT  DESIGNATED
    3  TO  TAKE  SUCH  TESTIMONY  SHALL NOT BE BOUND BY COMMON LAW OR STATUTORY
    4  RULES OF EVIDENCE OR BY TECHNICAL OR FORMAL RULES OF PROCEDURE.
    5    15.  IN  THE EVENT THAT THE DEPARTMENT SHALL DENY THE APPLICATION FOR,
    6  OR REVOKE OR SUSPEND ANY SUCH LICENSE, OR IMPOSE ANY FINE OR  REPRIMAND,
    7  ITS  DETERMINATION  SHALL  BE  IN  WRITING  AND  OFFICIALLY  SIGNED. THE
    8  ORIGINAL OF SUCH DETERMINATIONS, WHEN SO SIGNED, SHALL BE FILED  IN  THE
    9  OFFICE  OF  THE  DEPARTMENT  AND  COPIES  THEREOF SHALL BE MAILED TO THE
   10  APPLICANT OR LICENSEE AND TO THE COMPLAINANT WITHIN TWO DAYS AFTER  SUCH
   11  FILING.
   12    16.  THE  DEPARTMENT,  ACTING  BY  THE  OFFICE OR PERSON DESIGNATED TO
   13  CONDUCT THE HEARING PURSUANT TO SUBDIVISION THIRTEEN OF THIS SECTION  OR
   14  BY  SUCH  OTHER  OFFICER OR PERSON IN THE DEPARTMENT AS THE SECRETARY OF
   15  STATE MAY DESIGNATE, SHALL HAVE THE POWER TO SUSPEND THE LICENSE OF  ANY
   16  LICENSEE  WHO  HAS  BEEN  CONVICTED  IN THIS STATE OR ANY OTHER STATE OR
   17  TERRITORY OF A FELONY OR OF ANY MISDEMEANOR FOR A PERIOD  NOT  EXCEEDING
   18  THIRTY  DAYS  PENDING  A  HEARING  AND  A  DETERMINATION OF CHARGES MADE
   19  AGAINST HIM OR HER. IF SUCH HEARING IS ADJOURNED AT THE REQUEST  OF  THE
   20  LICENSEE, OR BY REASON OF ANY ACT OR OMISSION BY HIM OR HER OR ON HIS OR
   21  HER  BEHALF,  SUCH SUSPENSION MAY BE CONTINUED FOR THE ADDITIONAL PERIOD
   22  OF SUCH ADJOURNMENT.
   23    17. THE ACTION OF THE DEPARTMENT IN GRANTING OR REFUSING TO  GRANT  OR
   24  TO  RENEW  A  LICENSE UNDER THIS ARTICLE OR IN REVOKING OR SUSPENDING OR
   25  REFUSING TO REVOKE OR SUSPEND SUCH A LICENSE OR  IMPOSING  ANY  FINE  OR
   26  REPRIMAND  SHALL  BE  SUBJECT TO REVIEW BY A PROCEEDING INSTITUTED UNDER
   27  ARTICLE SEVENTY-EIGHT OF  THE  CIVIL  PRACTICE  LAW  AND  RULES  AT  THE
   28  INSTANCE  OF  THE APPLICANT FOR SUCH LICENSE, THE HOLDER OF A LICENSE SO
   29  REVOKED, SUSPENDED, FINED OR REPRIMANDED.
   30    18. FOR THE PURPOSE OF THIS ARTICLE, LICENSEES MAY BE HELD RESPONSIBLE
   31  FOR STATEMENTS, REPRESENTATIONS, PROMISES OR ACTS OF THEIR EMPLOYEES  OR
   32  THEIR  AGENTS  WITHIN  THE  SCOPE OF THEIR AUTHORITY; PROVIDED, HOWEVER,
   33  THAT LICENSEES SHALL NOT BE HELD RESPONSIBLE FOR STATEMENTS, REPRESENTA-
   34  TIONS, PROMISES OR ACTS WHICH ARE  CONTRARY  TO  INSTRUCTIONS  OR  WHICH
   35  CONSTITUTE  GROSS  NEGLIGENCE  OR  INTENTIONAL TORTS UNLESS SPECIFICALLY
   36  AUTHORIZED BY THE LICENSEE.
   37    19. (A) ANY PERSON, FIRM  OR  CORPORATION  THAT  OPERATES  AS  A  DEBT
   38  COLLECTION  AGENCY  WITHOUT  A  LICENSE SHALL BE REQUIRED TO PAY A CIVIL
   39  PENALTY TO THE DEPARTMENT OF NOT MORE  THAN  FIVE  HUNDRED  DOLLARS  PER
   40  ATTEMPT TO COLLECT A DEBT IN VIOLATION OF THIS SECTION.
   41    (B)  IN  ADDITION TO ANY OTHER PENALTIES, IF A PERSON IS FOUND TO HAVE
   42  COMMITTED REPEATED, MULTIPLE OR PERSISTENT VIOLATIONS OF  ANY  PROVISION
   43  OF  THIS  ARTICLE,  SUCH  PERSON  MAY BE RESPONSIBLE FOR THE COST OF THE
   44  DEPARTMENT'S INVESTIGATION.
   45    S 604-M. SURETY BONDING REQUIREMENT. 1. AS A CONDITION OF OBTAINING  A
   46  LICENSE PURSUANT TO THIS ARTICLE, EVERY DEBT COLLECTION AGENCY APPLICANT
   47  WHO  IS APPLYING FOR A LICENSE AND EMPLOYS BETWEEN ONE AND FOUR INDIVID-
   48  UALS ENGAGED IN THE COLLECTION OF DEBTS SHALL  OBTAIN  AND  CONTINUE  IN
   49  FULL  FORCE  AND  EFFECT  A  BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE
   50  LETTER OF CREDIT IN THE AMOUNT OF TEN THOUSAND DOLLARS TO BE FILED  WITH
   51  THE SECRETARY.
   52    2.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
   53  EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
   54  EMPLOYS BETWEEN FIVE AND NINE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF
   55  DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
       S. 190                              7
    1  CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
    2  TWENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
    3    3.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
    4  EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
    5  EMPLOYS BETWEEN TEN AND TWENTY INDIVIDUALS ENGAGED IN THE COLLECTION  OF
    6  DEBTS  SHALL  OBTAIN  AND  CONTINUE  IN  FULL  FORCE  AND EFFECT A BOND,
    7  CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF CREDIT IN THE AMOUNT  OF
    8  FIFTY THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
    9    4.  AS  A  CONDITION  TO OBTAINING A LICENSE PURSUANT TO THIS ARTICLE,
   10  EVERY DEBT COLLECTION AGENCY APPLICANT WHO IS APPLYING FOR A LICENSE AND
   11  EMPLOYS TWENTY OR MORE INDIVIDUALS ENGAGED IN THE  COLLECTION  OF  DEBTS
   12  SHALL  OBTAIN  AND CONTINUE IN FULL FORCE AND EFFECT A BOND, CONTRACT OF
   13  INDEMNITY,  OR  IRREVOCABLE  LETTER  OF  CREDIT,  IN   THE   AMOUNT   OF
   14  SEVENTY-FIVE THOUSAND DOLLARS TO BE FILED WITH THE SECRETARY.
   15    5.  SUCH  SURETY BOND, CONTRACT OF INDEMNITY, OR IRREVOCABLE LETTER OF
   16  CREDIT SHALL BE CONDITIONED THAT THE APPLICANT  WILL  COMPLY  WITH  THIS
   17  ARTICLE, ARTICLE TWENTY-NINE-H, AND ARTICLE TWENTY-NINE-HH OF THIS CHAP-
   18  TER  AND PAY ALL CIVIL PENALTIES, FINES, OR OTHER OBLIGATIONS IMPOSED BY
   19  THE SECRETARY OR A COURT OF LAW,  INVESTIGATORY  COSTS  REQUIRED  TO  BE
   20  PAID,  OR ANY FINAL JUDGMENT AGAINST THE LICENSEE PURSUANT TO SUCH ARTI-
   21  CLES.
   22    6. THE TOTAL LIABILITY IMPOSED ON THE SURETY BOND UNDER  THIS  SECTION
   23  FOR  ALL BREACHES OF THE BOND CONDITION IS LIMITED TO THE FACE AMOUNT OF
   24  THE BOND. SUCH LIABILITY IS LIMITED TO THE  AMOUNT  OF  THE  PENALTY  OR
   25  INVESTIGATORY COSTS. IN NO EVENT WILL THE SURETY ON A BOND BE LIABLE FOR
   26  TOTAL  CLAIMS  IN EXCESS OF THE BOND AMOUNT, REGARDLESS OF THE NUMBER OR
   27  NATURE OF CLAIMS MADE AGAINST THE BOND OR THE NUMBER OF YEARS  THE  BOND
   28  REMAINED IN FORCE.
   29    7. ANY SURETY ISSUING A BOND PURSUANT TO THIS SECTION AND ANY LICENSEE
   30  SHALL  BE  REQUIRED TO PROVIDE THIRTY DAYS NOTICE TO THE SECRETARY PRIOR
   31  TO THE EFFECTIVE DATE OF CANCELLATION OF THE BOND. THE FAILURE TO  MAIN-
   32  TAIN  SUCH  A  BOND  SHALL  OPERATE  TO  REVOKE  THE LICENSE OF THE DEBT
   33  COLLECTION AGENCY UPON NOTICE AND HEARING.
   34    S 604-N. PENALTIES. 1.  WHEREVER THERE SHALL BE A  VIOLATION  OF  THIS
   35  ARTICLE,  AN APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME
   36  OF THE PEOPLE OF THE STATE OF NEW YORK TO  A  COURT  OR  JUSTICE  HAVING
   37  JURISDICTION  BY  A  SPECIAL PROCEEDING TO ISSUE AN INJUNCTION, AND UPON
   38  NOTICE TO THE DEFENDANT OF  NOT  LESS  THAN  FIVE  DAYS,  TO  ENJOIN  OR
   39  RESTRAIN  THE  CONTINUANCE  OF SUCH VIOLATION; AND IF IT SHALL APPEAR TO
   40  THE SATISFACTION OF THE COURT OR JUSTICE  THAT  THE  DEFENDANT  HAS,  IN
   41  FACT,  VIOLATED  THIS SECTION, AN INJUNCTION MAY BE ISSUED BY SUCH COURT
   42  OR JUSTICE, ENJOINING AND RESTRAINING  ANY  FURTHER  VIOLATION,  WITHOUT
   43  REQUIRING  PROOF  THAT  ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED
   44  THEREBY. IN ANY SUCH PROCEEDING, THE COURT MAY MAKE  ALLOWANCES  TO  THE
   45  ATTORNEY  GENERAL  AS  PROVIDED  IN  PARAGRAPH SIX OF SUBDIVISION (A) OF
   46  SECTION EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND  RULES,
   47  AND  DIRECT  RESTITUTION.  WHENEVER  THE  COURT  SHALL  DETERMINE THAT A
   48  VIOLATION OF THIS SECTION HAS OCCURRED, THE COURT  MAY  IMPOSE  A  CIVIL
   49  PENALTY  OF NOT LESS THAN ONE HUNDRED DOLLARS NOR MORE THAN TEN THOUSAND
   50  DOLLARS FOR EACH VIOLATION. IN CONNECTION WITH ANY SUCH PROPOSED  APPLI-
   51  CATION,  THE  ATTORNEY  GENERAL  IS  AUTHORIZED TO TAKE PROOF AND MAKE A
   52  DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN ACCORDANCE
   53  WITH THE CIVIL PRACTICE LAW AND RULES.
   54    2. ANY PERSON WHO HAS BEEN THE SUBJECT OF AN ATTEMPT TO COLLECT A DEBT
   55  BY A DEBT COLLECTION AGENCY THAT IS NOT LICENSED PURSUANT TO THIS  ARTI-
   56  CLE  MAY  BRING AN ACTION IN HIS OR HER OWN NAME TO ENJOIN SUCH UNLAWFUL
       S. 190                              8
    1  ACT OR PRACTICE, AN ACTION TO RECOVER HIS OR HER ACTUAL DAMAGES OR THREE
    2  THOUSAND FIVE HUNDRED  DOLLARS,  WHICHEVER  IS  GREATER,  OR  BOTH  SUCH
    3  ACTIONS. THE COURT MAY, IN ITS DISCRETION, INCREASE THE AWARD OF DAMAGES
    4  TO  AN  AMOUNT  NOT  TO  EXCEED THREE TIMES THE ACTUAL DAMAGES UP TO TEN
    5  THOUSAND DOLLARS, IF THE COURT FINDS THE  DEFENDANT  WILLFULLY  VIOLATED
    6  THIS  ARTICLE. IN THE CASE OF ANY SUCCESSFUL ACTION TO ENFORCE THE FORE-
    7  GOING LIABILITY, THE COURT MAY AWARD THE COSTS OF  THE  ACTION  TOGETHER
    8  WITH REASONABLE ATTORNEY'S FEES.
    9    S  604-O.  APPLICABILITY.  1. EXCEPT AS PROVIDED IN SUBDIVISION TWO OF
   10  THIS SECTION, THE PROVISIONS OF THIS ARTICLE  SHALL  EXCLUSIVELY  GOVERN
   11  THE LICENSING OF DEBT COLLECTION AGENCIES NOTWITHSTANDING THE PROVISIONS
   12  OF  ANY  OTHER  LAW  TO  THE CONTRARY AND FURTHER, NO LOCAL LAW SHALL BE
   13  ENACTED WHICH SHALL REQUIRE ANY FEE OR  LICENSE  FOR  THE  LICENSURE  OR
   14  REGISTRATION OF DEBT COLLECTION AGENCIES.
   15    2.  THE  PROVISIONS OF THIS ARTICLE SHALL NOT BE CONSTRUED TO LIMIT IN
   16  ANY WAY THE AUTHORITY OF A POLITICAL SUBDIVISION TO ENACT, IMPLEMENT AND
   17  CONTINUE TO ENFORCE LOCAL LAWS AND REGULATIONS GOVERNING  THE  LICENSURE
   18  OR REGISTRATION OF DEBT COLLECTION AGENCIES THAT WERE IN EFFECT PRIOR TO
   19  THE  EFFECTIVE  DATE OF THIS ARTICLE, OR TO ENACT, IMPLEMENT AND ENFORCE
   20  ANY AMENDMENTS THERETO.
   21    S 3. Subdivision (e) of rule 3015 of the civil practice law and rules,
   22  as amended by chapter 21 of the laws of 2013,  is  amended  to  read  as
   23  follows:
   24    (e)  License  to  do  business.  Where the plaintiff's cause of action
   25  against a consumer arises from the plaintiff's  conduct  of  a  business
   26  which is required by state or local law to be licensed by the department
   27  of  consumer affairs of the city of New York, the Suffolk county depart-
   28  ment of consumer affairs, the Westchester county department of  consumer
   29  affairs/weight-measures,  the  county  of Rockland, the county of Putnam
   30  [or], the Nassau county department of consumer affairs OR THE DEPARTMENT
   31  OF  STATE PURSUANT TO ARTICLE TWENTY-NINE-HHH OF  THE  GENERAL  BUSINESS
   32  LAW,  the  complaint  shall allege, as part of the cause of action, that
   33  plaintiff was duly licensed at the time of services rendered  and  shall
   34  contain  the  name  and  number, if any, of such license and the govern-
   35  mental agency which issued such license. The failure of the plaintiff to
   36  comply with this subdivision will  permit  the  defendant  to  move  for
   37  dismissal  pursuant  to paragraph seven of subdivision (a) of rule thir-
   38  ty-two hundred eleven of this chapter.
   39    S 4. This act shall take effect on the one hundred eightieth day after
   40  it shall have become a law; provided, however, that effective immediate-
   41  ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
   42  necessary  for  the  implementation of this act on its effective date is
   43  authorized and directed to be made  and  completed  on  or  before  such
   44  effective date.