New York Debt Collection Laws Stricter than Federal Law

It is not illegal for a collection company to collect a debt. However, New York debt collection laws, as well as federal laws, place strict parameters on how collection companies may do this.

Federal laws protect consumers from harassment from debt collectors. The Fair Debt Collection Practices Act (FDCPA) was passed in 1978 to help protect Americans from harassing practices by debt collectors.

The FDCPA establishes creditors as those who are third-party debt collectors such as debt collection agencies and are attempting to collect debts on behalf of another entity.

Under the FDCPA, a collector cannot call someone who owes a debt before 8:00 AM or after 9:00 PM, and may not call a place of employment if a debtor tells the collector to not call any longer. This also applies to calls made to a home if the request is made in writing.

The FDCPA prohibits collectors from making threats in any way to debtors and may only inform the debtor of a debt and request payment.

New York debt collection laws, however, build on the FDCPA and provide more prohibitions on what debt collectors may do.

In 2015, New York debt collection laws got a lot more serious. New York Governor Andrew Cuomo and the New York Department of Financial Services revealed increased regulations for debt collection agencies.

New York debt collection laws generally prohibit collectors from harassing or abusing debtors and prohibit deceitful or misleading practices.

Among the things that are now illegal under New York debt collection laws are sending confusing letters, communicating with 3^rd parties about a debt, making threats, harassment, adding fees or collections charges to the debt, calling too often or at inconvenient times of day, collecting on old debts and making robocalls.

These increased New York debt collection laws also focus on statute of limitation disclosures, account specific disclosures, debt validation requirements as well as using email to communicate with the debtor about a debt.

Under the New York debt collection law, debt collection agencies must disclose if a debt has passed the statue of limitations for collecting that debt.

According to Inside Arm, the disclaimer must say that the creditor or collector believes that the debt may be beyond the statute of limitations and the borrower may choose to pay the debt if he or she so wishes.

Sample language a debt collector may use when providing this disclaimer reads, “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.”

According to Inside Arm, Governor Cuomo stated, “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.”