Is a Company Ignoring New York Debt Collection Rules?

New York debt collection rules are stricter than federal regulations, but some collection companies may be ignoring these restrictions and taking advantage of consumers.

Basics of New York Debt Collection Rules

Federal debt collection regulations are known as the Fair Debt Collection Practices Act (FDCPA), and was passed in 1978 to protect consumers from debt collection harassment. Federal law prohibits debt collectors from calling before 8:00 AM or after 9:00 PM.

If the debtor says the collection company cannot call them at work, then they are no longer able to call at work. The FDCPA also has rules against debt collectors threatening debtors, allowing them instead to offer information about a consumer’s debt and how to pay it.

New York debt collection rules expand on these laws, making them stricter. This is in part the result of recent changes, when New York Governor Andrew Cuomo increased debt collection regulations back in 2015. Governor Cuomo worked together with the New York Department of Financial Services to make these changes.

Governor Cuomo released a statement about these expanded New York debt collection rules, saying, “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.”

These changes work together to prevent the harassment and abuse of debtors in ways that had not previously been acknowledged, as well as prohibit the deceitful or misleading practices sometimes used in debt collection.

According to these updated New York debt collection rules, debt collectors are banned from the following practices:

• Sending confusing letters
• Communicating with third parties about a debt
• Making threats
• Harassment
• Adding fees or collection charges to the debt
• Calling too often
• Calling at inconvenient times of day
• Collecting on old debts
• Making robocalls

The more intense New York debt collection rules also deal with disclosure practices, statute of limitations, account specifics, and debt validation requirements. New rules require that debt collection agencies are required to disclose if a debt has passed the statute of limitations, or if they believe that the debt will go beyond the statute of limitations.

In order to provide these disclosures to debtors, collection agencies often use a script with this kind of a disclaimer: “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.”

New York Debt Collection Lawsuits

If you live in New York and a debt collector has used unfair debt collection practices, you may be able to file a debtors rights lawsuit and gain compensation owed for violations of federal and/or state debt collection regulations.