NYDFS Issues Amendments to Debt Collection Rules; Comment Period Open Until Next Week

The New York Department of Financial Services has issued a series of amendments to its debt collection rules for third-party debt collectors and debt buyers that could change how consumers are communicated with, including the information that must be provided after an initial communication is made. Comments on the proposed rule are due by Monday, November 8.

The proposed rule changes come at a time when a new law requiring collectors to provide an additional disclosure on initial letters sent to consumers, letting consumers know that the letter can be requested in an alternative format, such as large print, braille, or audio compact disc, is set to go into effect next week, and as collectors try to get ready for the enactment of Regulation F on November 30.

Among the proposed changes are, that within five days after an initial communication with a consumer, collectors must clearly and conspicuously send written notification to the consumer letting him or her know:

• The name of the creditor to which the debt was originally owed or alleged to be owed;
• The account number, if any, or a truncated version of such account number, associated with the debt;
• The merchant brand, affinity brand, or facility name, if any, associated with the debt;
• The name of the creditor to which the debt is currently owed;
• The date on which the consumer allegedly defaulted on the debt;
• The date of the last payment, including any partial payment;
• For a debt that has not been reduced to a judgment, the applicable statute of limitations for the debt, expressed in years; and
• An itemized accounting of the debt, including the current amount due.

Collectors would also be barred from communicating by telephone or other means of oral communication when attempting to collect on debts for which the statute of limitations has expired.

Collectors would also be limited to making three attempts to contact a consumer via telephone in a seven-day period and only allowed to have one conversation unless a consumer requests to be contacted.

Collectors would be allowed to communicated with consumers via electronic channels only if the consumer has voluntarily provided consent directly to the debt collector.