Proposed Amendment to Debt Collection Regulation Will Help Ensure New Yorkers Pay Only Debts They Owe and Only Pay Them Once

Acting Superintendent of Financial Services Adrienne A. Harris today announced that the New York State Department of Financial Services (DFS) proposed a new amendment to 23 NYCRR 1, the Department’s regulation governing debt collectors and debt buyers, to protect consumers from predatory debt collection practices and scams. Considering the findings from DFS’ investigations of abusive and deceptive debt collection, as well as data on consumer complaints to regulators, the Department is proposing the amendment to ensure consumers pay only debts they owe and pay them only once.

“Predatory debt collection practices can deceive consumers and ultimately lead them further into economic hardship,” said Acting Superintendent Harris. “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 proposed amendment will:

  • Help ensure consumers pay only debts they owe and pay them only once by mitigating opportunity for predatory debt collection through changes that address specific actors and specific harms;
  • 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;
  • 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; and
  • Limit harassing phone calls and other excessive communication from debt collectors.

To access a copy of the proposed amendment, please go to the DFS website.