The new NYS debt collection regs

[RobertEG]

A reminder that the new New York State debt collection regulations enacted in December, 2014 go into effect beginning March 3rd. Details of the new regs are posted in the Credit in the News forum. In general, the Rules require debt collectors to provide debtors with more information about their rights in the debt collection process and specific information about the size of a debt at the time it was charged off, as well as information about any interest that has accrued. In addition, for the first time in U.S. consumer protection law history, the Rules require a debt collector to maintain reasonable procedures for determining the statute of limitations applicable to a debt it is collecting and, if the statute of limitations applicable to a debt has expired, to provide “clear and conspicuous” notice to the consumer, prior to accepting payment on the debt, that: the debt collector believes that the statute of limitations applicable to the debt has expired; suing on a debt for which the statute of limitations has expired is a violation of the FDCPA; and, if sued on a debt for which the statute of limitations has expired, the consumer may raise this fact as a defense and have the action dismissed. The Rules also require debt collectors to “substantiate” that a consumer owes the debt in question. Presently, the FDCPA only requires debt collectors to “verify” the debt within thirty days of a first collection attempt. New York’s Rules, however, will permit a consumer to demand “substantiation” at any point in the debt collection process, which will trigger a stay of the process and provide a 60-day window for the debt collector to validate the debt and confirm its right to collect it. Most of the new Rules are set to go into effect on March 3, 2015. The provision requiring notice of the expiration of the statute of limitations will go into effect on August 30, 2015.

[Anonymous]

---

@RobertEG wrote:
A reminder that the new New York State debt collection regulations enacted in December, 2014 go into effect beginning March 3rd. Details of the new regs are posted in the Credit in the News forum. In general, the Rules require debt collectors to provide debtors with more information about their rights in the debt collection process and specific information about the size of a debt at the time it was charged off, as well as information about any interest that has accrued. In addition, for the first time in U.S. consumer protection law history, the Rules require a debt collector to maintain reasonable procedures for determining the statute of limitations applicable to a debt it is collecting and, if the statute of limitations applicable to a debt has expired, to provide “clear and conspicuous” notice to the consumer, prior to accepting payment on the debt, that: the debt collector believes that the statute of limitations applicable to the debt has expired; suing on a debt for which the statute of limitations has expired is a violation of the FDCPA; and, if sued on a debt for which the statute of limitations has expired, the consumer may raise this fact as a defense and have the action dismissed. The Rules also require debt collectors to “substantiate” that a consumer owes the debt in question. Presently, the FDCPA only requires debt collectors to “verify” the debt within thirty days of a first collection attempt. New York’s Rules, however, will permit a consumer to demand “substantiation” at any point in the debt collection process, which will trigger a stay of the process and provide a 60-day window for the debt collector to validate the debt and confirm its right to collect it. Most of the new Rules are set to go into effect on March 3, 2015. The provision requiring notice of the expiration of the statute of limitations will go into effect on August 30, 2015.

---

Thanks for posting..

[Momof5]

"suing on a debt for which the statute of limitations has expired is a violation of the FDCPA"  No it isn't.  A CA has every right to sue on an expired debt in most states. (SOME states do not allow it).  It is up to the defendant to raise the SOL as an affirmative defense to get case dismissed.

[Anonymous]

---

@Momof5 wrote:

"suing on a debt for which the statute of limitations has expired is a violation of the FDCPA"  No it isn't.  A CA has every right to sue on an expired debt in most states. (SOME states do not allow it).  It is up to the defendant to raise the SOL as an affirmative defense to get case dismissed.

---

Nation wide, yes you are correct, but under the new statute, the state of New York *now* considers it to be a violation of FDCPA. I would assume they are placing it in the category of 'misrepresenting the character of a debt'. Its about time a state did this, it should be the case in ALL states.

[Momof5]

---

@Anonymous wrote:

---

@Momof5 wrote:

"suing on a debt for which the statute of limitations has expired is a violation of the FDCPA"  No it isn't.  A CA has every right to sue on an expired debt in most states. (SOME states do not allow it).  It is up to the defendant to raise the SOL as an affirmative defense to get case dismissed.

---

Nation wide, yes you are correct, but under the new statute, the state of New York *now* considers it to be a violation of FDCPA. I would assume they are placing it in the category of 'misrepresenting the character of a debt'. Its about time a state did this, it should be the case in ALL states.

---

Most likely.

[Anonymous]

I wonder if "cease collection activities" until substantiated includes reporting to CRA.

[RobertEG]

There are failrly recent cases upheld on appeal that have prevailed in a finding that bringling legal action after they are aware that SOL has expired is a violation of the FDCPA.

No, the FDCPA does not explicitly list bringing of legal action when the debt collector is aware of expiration of the SOL has occured, but nonetheless courts have held that it is a prohibiited action that a debt collector knows that they cannot take and prevail.

So yes, bringing legal action with knowledge of expiration of SOL can and has been affirmed on appeal a a violattionof the ffederal FDCPA.