Bill > A01427

This bill provides comprehensive regulation of debt settlement companies in New York, establishing a detailed licensing and operational framework to protect consumers. The bill requires debt settlement companies to obtain a license from the state superintendent of financial services and imposes strict requirements on how these companies can interact with consumers. Key provisions include mandating clear disclosures about potential risks, limiting fees that can be charged, requiring individualized financial analysis before entering agreements, and establishing consumer protections such as the right to cancel services at any time. The bill defines debt settlement services as offering to help consumers reduce their unsecured debt by negotiating with creditors for less than the full amount owed, and it prohibits various deceptive practices like advising consumers to stop paying creditors or misrepresenting potential outcomes. Companies must provide extensive written documentation, including a "Debtor Notice and Rights Form" that clearly explains potential consequences of debt settlement, and they can only charge specific types of fees with strict limits. The legislation aims to prevent predatory practices in the debt settlement industry by creating a comprehensive regulatory structure with significant penalties for non-compliance, while ensuring transparency and protecting consumers from potentially harmful financial services.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/A1427