If passed, New York SB 219/AB 455 would require debt collection agencies to be licensed and post a surety bond, contract of indemnity or irrevocable letter of credit payable to the people of New York.
As a type of license bond, this bond would require the licensee to comply with all applicable laws and pay all costs and penalties as required. The bond amount would be based on how many people the licensee employs.
- $10,000 of coverage for 1-4 employees
- $25,000 of coverage for 5-9 employees
- $50,000 of coverage for 10-20 employees
- $75,000 of coverage for 20+ employees
The surety’s total liability would be limited to the face amount of the collection agency bond, regardless of the number or nature of claims made against it or the number of years it remains in force.
According to the bill’s text, its purpose is to “protect consumers against unfair and deceptive debt collection practices and maintain a high level of integrity and professionalism in the debt collection industry, by requiring third-party debt collectors and debt buyers to obtain a license from the Department of State.”
Click here to read SB 219/AB 455 in its entirety. The bill was referred to the Consumer Protection Committee on January 9, 2013, where it awaits further action.