The New York State Department of Financial Services (NYSDFS) announced in the State Register, the adoption of a final rule regulating debt collection practices in the state of New York. These newly enacted debt collection regulations will become effective February, 2nd, 2015.
The rules require debt collectors to provide several initial disclosures, including consumers’ rights under the FDCPA, protected property, an itemization of charged-off debts, and a statute of limitations disclosure.
Debt collectors that collect in the state of New York should examine the regulations carefully and begin updating their compliance management systems to meet the new requirements. Collection notices sent to New York will need to be updated to include the new disclosure requirements.
This information is not intended to be legal advice and may not be used as legal advice. Legal advice must be tailored to the specific circumstances of each case. Every effort has been made to assure that this information is up-to-date as of the date of email. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own counsel.
MORE FROM ACA INTERNATIONAL
The new regulations require debt collectors to provide certain disclosures in their initial communications with consumers. These disclosures are outlined below.
Disclosure #1 – For all Debts
Within 5 days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, provide the consumer clear and conspicuous written notification of the following:
Debt collectors, in accordance with the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., are prohibited from engaging in abusive, deceptive, and unfair debt collection efforts, including but not limited to:
a) the use or threat of violence;
b) the use of obscene or profane language; and
c) repeated phone calls made with the intent to annoy, abuse, or harass.
[Note that the NYSDFS did not provide precise language for this disclosure; as such, members should track the language of the statute as closely as possible.]
Disclosure #2 – For all Debts
The following notice:
“If a creditor or debt collector receives a money judgment against you in court, state and federal laws may prevent the following types of income from being taken to pay the debt:
1. Supplemental security income, (SSI);
2. Social security;
3. Public assistance (welfare);
4. Spousal support, maintenance (alimony) or child support;
5. Unemployment benefits;
6. Disability benefits;
7. Workers’ compensation benefits;
8. Public or private pensions;
9. Veterans’ benefits;
10. Federal student loans, federal student grants, and federal work study funds; and
11. Ninety percent of your wages or salary earned in the last sixty days.”
Disclosure #3 – For Charged-Off Debts Only
Within 5 days after the initial communication with a consumer in connection with the collection of any charged-off debt, a debt collector must provide the consumer clear and conspicuous written notification of the following, unless the following information is contained in the initial communication or the consumer has paid the debt:
(1) The name of the original creditor; and
(2) An itemized accounting of the debt, including:
a) the total amount of the debt due as of charge-off;
b) the total amount of interest accrued since charge-off;
c) the total amount of non-interest charges or fees accrued since charge-off;
d) the total amount of payments made on the debt since the charge-off.
Additional Disclosure for Debts Beyond the Statute of Limitations
A debt collector must provide a disclosure if it believes the statute of limitations for the debt has expired. The following model language was provided by the Department to satisfy this notice requirement.
“We are required by regulation of the New York State Department of Financial Services to notify you of the following information. This information is NOT legal advice:Your creditor or debt collector believes that the legal time limit (statute of limitations) for suing you to collect this debt may have expired. It is a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., to sue to collect on a debt for which the statute of limitations has expired. However, if the creditor sues you to collect on this debt, you may be able to prevent the creditor from obtaining a judgment against you. To do so, you must tell the court that the statute of limitations has expired.
Even if the statute of limitations has expired, you may choose to make payments on the debt. However, be aware: if you make a payment on the debt, admit to owing the debt, promise to pay the debt, or waive the statute of limitations on the debt, the time period in which the debt is enforceable in court may start again. If you would like to learn more about your legal rights and options, you can consult an attorney or a legal assistance or legal aid organization.”