ALBANY — The New York state Department of Financial Services is proposing an amendment to a 2020 debt collection law that will extend consumer protection from predatory debt collection practices.
Acting Superintendent of Financial Services Adrienne A. Harris said the proposed amendment follows findings from a recent department investigation revealing abusive and deceptive debt collection, as well as data on consumer complaints to regulators.
“Predatory debt collection practices can deceive consumers and ultimately lead them further into economic hardship,” Harris said. “DFS’ proposed amendment requires clear communication on consumer debt obligations and ensures the consumer has the right information to dispute the validity of the debt. This amendment enhances consumer protections through increased transparency and prevention of harassment, helping put people on a path to financial well-being.”
This proposed amendment will enhance disclosures to consumers, reduce opportunities for debt collectors to mislead consumers about their debt obligations, and prevent harassment of consumers with excessive communication through stricter limits on phone calls than federal regulations impose.
The amendment is intended to help ensure consumers pay only debts they owe and pay them only once by mitigating opportunities for predatory debt collection through changes that address specific actors and specific harms. It will require debt collectors to provide key data about the alleged debt to the consumer and maintain records relating to the alleged debt so that the consumer can identify the debt or dispute the allegation.
The legislation is also intended to reduce opportunities for debt collectors to mislead consumers about the character of the debt and their obligations to pay through disclosure requirements, including mandated written disclosures. It also proposes to limit harassing phone calls and other excessive communication from debt collectors.