New York State Consumer Debt Laws

In New York, consumer debt laws protect the state's citizens against deceptive debt collection practices. In addition to complying with the Federal Trade Commission's federal consumer protection laws, debt collectors and financial institutions must also comply with the state's consumer protection regulations. The New York State Debt Collection Procedures Law prohibits creditors from engaging in deceptive collection practices.

New York State Debt Collection Procedures Law

The federal Fair Debt Collection Practices Act does not apply to direct contacts from creditors. The federal law applies only to debt collection procedures utilized by third-party debt collection agencies hired by creditors or lending institutions to help them collect their debts. To help consumers from deceptive and harassing collection procedures used directly by creditors, states passed additional laws protecting consumers against direct contact by creditors. In New York, the New York State Debt Collection Procedures Law prohibits creditors from contacting employers without first obtaining a legal judgment, using threats to collect more than the amount owed, contacting family and friends during "unusual" hours to harass them and falsely representing their affiliation with government programs.

Prohibitions on Contacting Consumers

The federal and state laws preclude debt collectors from threatening violence or criminal prosecution, using profanity, constantly contacting debtors to harass them and require agencies to disclose their identities immediately. Debt collection agencies may not falsely represent themselves as government officials, threaten to sell consumers' property or falsely imply connections with official government accrediting bureaus or falsely state they are attorneys. Although debt collection agencies can contact debtors by phone, fax, mail or in-person, their attempts must be between 8 a.m. and 9 p.m.

Consumers' Rights

Consumers have a right to send a written letter to collection agencies and debt collectors to dispute their debts within 30 days of receiving initial notification of their outstanding debts. Once a debt collector receives written notice of the pending dispute from the consumer, it must cease all future efforts to contact the consumer or any of the consumer's friends and family. However, once the creditor receives notice of the debt's validity, the creditor may resume efforts to contact the consumer and third parties during reasonable hours.

New York law imposes statutes of limitations regulations on collection agencies. Generally, creditors in New York have only six years to collect their debts from the time of the most recent debt payment. However, creditors can sell their "old" debts to credit agencies to collect their debts, although consumers may be able to assert their statute of limitations rights.

Considerations

Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.