On December 28, 2022, the New York Department of Financial Services released its debt collection rule amendments to 23 NYCRR 1, the regulation titled “Debt Collection by Third-Party Debt Collectors and Debt Buyers.” The initial proposed amendments were opened to public comment in late 2021. The rule amendments are scheduled to take effect in late June 2023. The amendments represent an attempt to align the Department of Financial Services’ regulations with those requirements enacted by the Consumer Financial Protection Bureau in Regulation F, which became effective on November 30, 2021.
Notable changes to the New York regulation include the requirement that electronic communication may be used only under certain circumstances, such as when the consumer has voluntarily provided contact information to the collector (and that contact information is not owned by the consumer’s employer) and when the consumer has given revocable consent in writing to receive electronic communication.
The amendments also add a prohibition on oral communications to the debtor by telephone or otherwise regarding a debt for which the debt collector has determined that the applicable statute of limitations has expired. Oral communications are only allowed if the debt collector receives “prior written and revocable consent” or has the express permission of a court of competent jurisdiction to contact the debtor.
Additionally, when sending the initial communication to the debtor, along with the follow-up written notification within five days, collectors must now also include various disclosures in the follow-up notification required under Regulation F. These disclosures include, amongst other requirements, validation information, the itemization date, and any merchant brand associated with the debt.
A comment period on the amendments is open until February 13, 2023.