New York State Unveils New Debt Collection Regulations

New York governor Andrew Quomo recently announced New York's new debt collection regulations. The regulations, issued under a provision of the New York Financial Services law, seek to provide consumers with additional protections that they did not previously have. The new regulations take effect March 3, 2015.

The new regulations require:

1. Improved disclosures. Under the new regulations, debt collectors must provide the amount of the debt owed when it was "charged off" by the original creditor. Collectors must also itemize interest and fees accrued after the charge off date.

2. Time-barred debts. The new regulations require debt collectors to inform consumers if a debt is past the applicable statute of limitations. They must also inform the consumer that the time-barred nature of the debt would be a defense to being sued on the debt. The hope is that, when consumers know their rights, they will be more likely to defend debt collection cases.

3. Substantiation of debt. The FDCPA provides a process for verifying a debt, but it is limited to a 30 day period. The new regulations allow consumers to request substantiation of the debt at any time during the collections process--a major change when compared to the FDCPA. Once a consumer makes such a request, the regulations require the collections to stop and the collector must provide the requested information within 60 days.

4. Written confirmations. When consumers enter into a settlement agreement, it must now be confirmed in writing. Also, when consumers pay off a debt obligation, it must be confirmed in writing.

5. Email. Consumers now have the option of communicating with collectors via email. This will allow them to avoid harassing phone calls.

Hopefully more states will follow suit and expand on the protections already provided under the FDCPA.

The full text of the new regulations is here.