New York Consumer Credit Fairness Act

The New York Consumer Credit Fairness Act is a piece of statewide legislation that took effect on January 1, 2011. It brought several changes to the procedure by which creditors can take legal action to enforce an outstanding consumer debt. The key measures in the act all placed tougher requirements on creditors, thus benefiting consumers.

Statute of Limitations

The statutory limitations period for consumer credit debt was reduced from six to three years. Unlike most such limitations periods (in which the only change is that a court will not enforce a debt once the limitations period expires), the New York law specifically bars debt collectors from attempting to collect an expired debt. This includes any phone or mail contact.

Legal Action

A creditor bringing legal action against a borrower over consumer credit must now provide a wide range of information about the debt. This includes the original creditor's name, the details of the last payment received, details of the amount to be collected, the final four digits of the account number, and the full details and sequence of the rights to the debt being passed on to different creditors (if applicable).

Notification

The creditor taking legal action must provide the court clerk with a postage-paid envelope addressed to the borrower, containing notification of the lawsuit. The letter must be in both English and Spanish. This requirement was already in place in New York City and is extended statewide by the act.

Affidavits

If a creditor requests a default judgment, he must provide two or more affidavits. One is from the original creditor, detailing the debt and the outstanding amount. For each time the debt has been sold on, a similar affidavit must be produced from the seller of the debt. Finally, the creditor bringing the case must have a witness sign an affidavit confirming he has seen the chain of title (the sequence tracing the debt from the original creditor to the creditor bringing the case).