Recently, the NYC Department of Consumer and Worker Protection (DCWP) published an FAQ document providing guidance on amended rules for debt collectors, set to become effective on October 1. As previously covered by InfoBytes, the amended debt collection rules require debt collectors to provide specific disclosures (when collecting on time-barred debt), maintain comprehensive records of communications, consumer complaints, and obtain consumer consent for electronic communications with clear opt-out options.

The FAQs explained that the amended rules apply to all debt collection activities initiated on or after October 1, regardless of when the debt was originally incurred. The FAQs also clarified that creditors collecting their own debts are still subject to these rules, stating that “[c]reditors collecting or attempting to collect in their name debts owed or asserted to be owed to them are still covered” under the NYC Administrative Code and its Rules, including the amended debt collection rules. Additionally, the FAQs explained that third-party collectors working on behalf of governmental entities, including the State or City of New York, must comply with these rules — except when the collection is conducted by the governmental entity itself.

The FAQ also provided guidance on the record-keeping requirements for debt collectors, emphasizing that all oral communications with consumers must be retained, including any oral communications initiated by a consumer. The FAQs specified that although debt collectors are no longer required to maintain a monthly log, they must keep records in an easily identifiable format for three years. The FAQs also confirmed that debt collectors must provide a mini-Miranda warning during communications, which includes informing consumers that communications may be recorded and used for debt collection purposes.

For debt validation letters, the FAQs specified the required content of such letters, including required disclosures about medical debt and language access services available to consumers. The FAQs explained that all debt validation letters must include a medical debt disclosure explaining that medical debt information cannot be reported to a consumer reporting agency. The FAQs also explained the frequency limits on contacting consumers, explaining that the amended rules allow debt collectors to contact a consumer at most three times within a seven-day period. The FAQs clarified that responses from consumers or other “communications initiated by or at the request of a consumer” are exempt from this cap. Regarding disputed debts, the FAQs explained that, upon receiving a dispute, debt collectors must pause collection activities for 45-days or until the debt collector provides verification that the debt is owed and accurate. The FAQs further explained that if the debt collector is unable to provide verification of the debt within 45-days of receiving a dispute, the debt collector cannot continue collecting on the debt.

The FAQ also clarified obligations related to credit reporting, stating that if a debt collector does not regularly furnish information to consumer reporting agencies, that debt collector is not required to provide a credit reporting disclosure in the five-day notice sent to consumers. Finally, the FAQ confirmed that debt collectors are liable for any violations of NYC law committed by their employees and any violations committed by third parties contracted by the debt collectors to provide collection activities, such as third-party call centers and mail distribution centers.