As discussed in our June 12th post, the New York City Department of Consumer Affairs (“DCA”) issued new debt collection rules related to limited English proficiency servicing. These rules took effect June 27, 2020, but due to the COVID-19 crisis, DCA provided the industry with a 60-day enforcement grace period until August 26, 2020.
After discussions with industry trade groups requesting clarifications on the new rules, DCA agreed to issue formal guidance answering Frequently Asked Questions (“FAQs”). This formal guidance was released today, August 6, 2020. Specifically the FAQs clarify the following:
- Applicability of the rules: The new rules apply to anyone required to obtain a debt collection agency license and certain provisions also apply to creditors as well. The provisions applicable to creditors are laid out in detail in the guidance. Additionally, the guidance clarifies that the rules do not apply to litigation activities that only a licensed attorney can perform.
- Language access services: “Language access services” means any service available in a language other than English. Debt collectors are permitted to provide some language access services and not others. The new rules do not require debt collectors to offer any language access services but provide that if a collector does not offer any such services, that must be disclosed in its initial validation notice and on its public website.
- Annual reports: Annual reports must be maintained in the debt collection agency’s records and produced to DCA upon request. The annual report form is available at nyc.gov/BusinessToolbox.
- Recording language preference: Debt collectors are never permitted to infer the language preference of a consumer. Debt collectors are not required to request a consumer’s language preference in each communication with the consumer. Collectors must make reasonable attempts to obtain and record the language preference, but if a consumer declines to provide it, the obligation can be satisfied by recording the non-response.
- Legally required notices: A debt collector must confirm the identity of the consumer and provide any legally required notices before requesting the consumer’s language preference. If the collector has language access services that enable them to communicate in the consumer’s preferred language, the collector must offer those services and repeat all notices in that language.
- Debt collectors involved in numerous business activities: If a collector is engaged in numerous business activities, it is only required to include the two required statements of 6 RCNY § 5-77(h) on its websites that relate to the collection of debts after debt collection procedures have begun.
The DCA notes in its guidance that it intends to modify the new rules to align with the interpretations provided in its FAQs. While this guidance is helpful in clarifying some of the questions these new rules raise, many questions still remain and unfortunately, DCA declined to provide any model disclosures in the FAQs relating to how to disclose the nature of what, if any, language access services are provided, to the dismay of many.