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New York To Roll Out Tough New Debt Collection Regulations

On December 3, 2014 New York State Governor Andrew M. Cuomo announced a series of new regulations aimed at curbing debt collection abuse in the state.

“Here in New York we will not tolerate debt collectors who wrongfully take advantage of consumers,” Governor Cuomo said. “That’s why we’re rolling out tough new regulations that protect borrowers and help crack down on illegitimate debt collection practices. These new tools and disclosures will protect New Yorkers across the state, and I am pleased that our administration is leading the way on this issue.”

The new regulations, which take effect on March 3, 2015, will force debt collectors to provide consumers with a series of disclosures and rights. Designed to supplement the consumer protections in the Fair Debt Collection Practices Act (“FDCPA”) and the New York General Business Law, these new reforms include:

  • Improved Disclosures and Debt Information
  • Protections Against Collection of “Zombie Debts”
  • “Substantiation” of the Debt Allegedly Owed
  • Written Confirmation of Settlement Agreements
  • Opportunity for Email Contact

According to the press release:

In 2014 alone, New York consumers have filed more than 20,000 complaints regarding debt collection practices. They report that debt collectors make harassing, aggressive calls to collect debts and sometimes attempt to collect an incorrect amount of money and even contact the incorrect person. Problems are especially frequent in the rapidly growing debt buying industry, where companies purchase defaulted debts for pennies on the dollar. To keep costs down, debt buyers often maintain shoddy records and do little to verify that they are contacting the correct debtor or for the correct amount of money. In addition, the same debt portfolios may be sold to multiple buyers, and without clear records, even consumers who have paid off a debt may be pursued for the same debt by a different collector.

With any luck, these new debt collection reforms will help New Yorkers by providing us all with much-needed additional rights and protections against collection harassment.

New regulations can be found here: http://www.dfs.ny.gov/legal/regulations/adoptions/dfsf23t.pdf

New York Department of Financial Services can be found here: http://www.dfs.ny.gov/consumer/debt-collect.htm

Governor Cuomo’s press release is here: http://www.governor.ny.gov/news/governor-cuomo-announces-new-regulations-against-abusive-and-deceptive-debt-collection

Photo credit: WorldSeriesBoxing

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By |December 15th, 2014|

About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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