N.Y. General Business Law § 604-BB – Notice of coerced debt

1. Within ten business days of receipt of the following, a creditor shall cease collection activities until completion of the review under subdivision three of this section:
1. (a) adequate documentation of coerced debt; and
2. (b) the debtor's statement that a particular debt being collected, or portion thereof, is coerced debt.
2.
1. (a) If a debtor notifies a creditor, either orally or in writing, that a debt is a coerced debt but does not provide the documentation required in subdivision one of this section, or such documentation is insufficient, such creditor shall provide written notice to such debtor that includes the following text: "UNDER NEW YORK GENERAL BUSINESS LAW 604-BB, YOU HAVE THE RIGHT TO DISPUTE DEBT THAT YOU BELIEVE IS COERCED DEBT. A DEBT IS "COERCED" WHEN IT IS INCURRED IN A CONSUMER'S NAME BECAUSE OF THREATS, INTIMIDATION, OR FORCE BY ANOTHER PERSON. TO DISPUTE COERCED DEBT, YOU MUST SUBMIT A "NOTICE OF COERCED DEBT" IN WRITING. THE "NOTICE OF COERCED DEBT" MUST INCLUDE TWO DOCUMENTS: 1 - A SWORN OR NOTARIZED STATEMENT BY YOU, THE ALLEGED DEBTOR, UNDER PENALTY OF PERJURY, STATING THAT A CERTAIN DEBT OR PORTION OF A DEBT BEING COLLECTED IS COERCED DEBT. 2 - "ADEQUATE DOCUMENTATION OF COERCED DEBT" TO PROVIDE "ADEQUATE DOCUMENTATION OF COERCED DEBT," YOU ARE REQUIRED TO PROVIDE ONLY ONE OF THE FOLLOWING DOCUMENTS, BUT YOU MAY PROVIDE MORE THAN ONE. 1 - A POLICE REPORT 2 - A COPY OF AN OFFICIAL VALID REPORT FILED BY YOU WITH A FEDERAL, STATE OR LOCAL LAW ENFORCEMENT AGENCY 3 - A COURT ORDER FINDING THAT THE DEBT WAS COERCED 4 - A NOTARIZED STATEMENT FROM A "QUALIFIED THIRD PARTY" THAT YOU REPORTED THE COERCED DEBT TO. EXAMPLES OF "QUALIFIED THIRD PARTIES" INCLUDE SOCIAL WORKERS AND ATTORNEYS; DOCTORS, NURSES, AND THERAPISTS; EMPLOYEES FROM GOVERNMENT OR NON-PROFIT AGENCIES THAT WORK WITH SURVIVORS OF VIOLENCE; MEMBERS OF THE CLERGY; AND LAW ENFORCEMENT OFFICERS. NO MATTER WHICH FORM OF "ADEQUATE DOCUMENTATION OF COERCED DEBT" YOU PROVIDE, IT MUST IDENTIFY THE PARTICULAR DEBT, STATE THAT IT IS COERCED DEBT, AND DESCRIBE THE CIRCUMSTANCES THAT CAUSED THE DEBT TO BE INCURRED. TO DISPUTE DEBT THAT YOU BELIEVE IS COERCED DEBT, PLEASE SEND THE REQUIRED DOCUMENTS TO (DESIGNATED ADDRESS). AFTER RECEIVING YOUR NOTICE OF COERCED DEBT, WE WILL INVESTIGATE YOUR CLAIM AND RESPOND IN WRITING WITHIN 35 BUSINESS DAYS. FOR MORE INFORMATION, PLEASE CALL (DESIGNATED PHONE NUMBER)."
2. (b) If a debtor notifies a creditor in writing that a particular debt being collected, or portion thereof, is coerced debt, but omits information under subdivision one of this section, and if such creditor does not cease such collection activities, such creditor shall provide written notice to such debtor of the additional information that is required.
3.
1. (a) Within ten business days of receiving all the information required under subdivision one of this section, the creditor shall, if such creditor furnishes adverse information about the debtor to a consumer reporting agency, notify such consumer reporting agency that the account is disputed.
2. (b) Within thirty business days of receiving all the information required under subdivision one of this section, the creditor shall complete a review considering all information provided by the debtor and other information available to such creditor in such creditor's file. In connection with such review and communication of the outcome of such review, the creditor shall:
  1. (i) neither directly nor indirectly contact the individual accused of causing the coerced debt to be incurred;
  2. (ii) use only the contact information the debtor provides with the information under subdivision one of this section when attempting to contact such debtor and shall not use any other contact information, even if associated with the account under review, when attempting to contact such debtor; and
  3. (iii) not disclose the documents, information, or contact information the debtor provides with the information under subdivision one of this section to any other person, including, but not limited to, joint account holders, without such debtor's express written authorization, except as reasonably necessary to bring and maintain an action authorized by subdivision one of section six hundred four-cc of this article, provided that under no circumstance shall the creditor disclose the contact information of the debtor unless directed by a court and such court shall only direct the disclosure of such information in a manner reasonably calculated to protect the safety of the debtor. For purposes of this subparagraph, sending documents, information, or contact information the debtor provides under subdivision one of this section to a mailing or electronic mail address other than the one provided by the debtor constitutes unlawful disclosure to a third party, even if such mail or electronic mail address is associated with the account.
3. (c) Within five business days of completing the review under paragraph (b) of this subdivision, a creditor who recommences collection activities based on such review shall notify the debtor in writing of such creditor's determination and the good faith basis for such determination, provided however such documentation shall not include personally identifiable information of another person. The written notice shall also include a notice of the debtor's right to request reconsideration of such determination to recommence collection activities under subdivision four of this section.
4. (d) Within five business days of completing the review under paragraph (b) of this subdivision, a creditor who ceases collection activities under this section and, based on such review, does not recommence such collection activities, shall:
  1. (i) notify the debtor in writing that it is ceasing collection activities based on such debtor's claim of coerced debt;
  2. (ii) contact any consumer reporting agencies to which it furnishes information about the debtor and the particular debt and instruct such consumer reporting agencies to delete such information; and
  3. (iii) if the creditor is also a debt collector or debt collection agency, as defined in section six hundred of this chapter, notify the original creditor that it has ceased collection activities because the debt was found to be a coerced debt.
4. A debtor who receives written notice under paragraph (c) of subdivision three of this section that the creditor will recommence collection activities against such debtor based on such creditor's determination under subdivision three of this section may make a request to the creditor that the creditor reconsider such determination to recommence collection activities within thirty days of the date of mailing of such written determination. A debtor requesting reconsideration of a creditor's determination to recommence collection activities shall be permitted to submit additional adequate documentation of coerced debt, as defined in this article. A creditor who receives a debtors request for reconsideration shall complete a review of all information, including additional adequate documentation submitted, within thirty days of receiving such request. Any further reconsideration of the creditor's determination with regard to such particular debt shall be at the discretion of the creditor. Submitting a request for reconsideration of the determination to the creditor shall not be a condition to bringing an action under section six hundred four-cc of this article.
5. No inference or presumption that the debt is valid or invalid, or that the debtor is liable or not liable for such debt, shall arise if the creditor decides after completing the review under subdivision three of this section to cease or recommence the debt collection activities. The exercise or non-exercise of rights under this section shall not constitute a waiver of any other right or defense of the debtor, creditor, debt collector, or any other person.
6. If at any time any individual or entity, including, but not limited to the creditor, such creditor's assignor, or any assignee, recommences collection activities on the debt after ceasing collection activities on such debt after the creditor determined the debt was a coerced debt, such debtor may submit a subsequent notice of coerced debt. A subsequent notice of coerced debt submitted under this subdivision shall be governed by subdivisions one through five of this section.
7.
1. (a) If a debtor injured by a violation of this section notifies the creditor of such violation, the creditor shall have fifteen days to cure such violation. If the creditor determines the violation is able to be cured, the creditor shall make any and all reasonable adjustments or corrections necessary to cure the violation with respect to the debtor. If the debtor notifies the creditor of a violation and the violation is not cured with respect to the debtor within fifteen days, and such inability to cure is not the result of a bona fide error, the debtor shall have a cause of action against the creditor to recover statutory damages of one thousand dollars, actual damages, if any, and the costs and reasonable attorneys' fees incurred in bringing such action.
2. (b) Collection activities, for the purposes of this section, do not include any communication between a creditor or debtor that is required by state or federal law or regulation.