The Department of Consumer and Worker Protection (DCWP) has announced updates to its debt collection regulations, aiming to enhance consumer protections and better align with current practices in the industry. Originally set to take effect on December 1, 2024, these regulations will now be implemented on April 1, 2025. This delay allows additional time for debt collectors to adjust their operations in response to the feedback provided by industry stakeholders. You can view the official notice of the date change here.
To provide an overview of these new rules, the DCWP will hold a public webinar from 2 to 3 p.m. EST on Thursday, November 7. This session will address the delay, key aspects of the amendments, and allow for questions from the public. A livestream of the webinar will be hosted on the department’s Facebook page
Background on Rule Changes
In June 2020, new requirements mandated that debt collectors inform consumers about language access services and maintain records related to these services. Over time, industry feedback highlighted areas for further refinement, prompting the Department to propose additional amendments. These changes also align with updates to federal regulations, specifically the Consumer Financial Protection Bureau’s 2020 revisions to the Fair Debt Collection Practices Act, which address current industry practices and evolving communication technologies.
Highlights of Proposed Amendments
In November 2022, the Department proposed amendments to enhance consumer protections, drawing from its extensive experience in regulating debt collection practices affecting New York City residents. A public hearing in December 2022 gathered comments from a wide range of stakeholders, including industry associations, consumer advocacy groups, and legal organizations. Following these discussions, a re-noticed proposal was issued in September 2023, reflecting feedback and further clarifications to ensure fair practices for debt collection.
Noteworthy provisions include:
- Section 2-191: Rescinding this section, with time-barred debt obligations now covered under Section 5-77.
- Section 2-193: Expanding reporting requirements to capture actions taken in any language, alongside other records showing compliance with laws.
- Section 5-76 and 5-77: Adding definitions and guidelines for clear communication with consumers, limiting communication frequency, and setting standards for disclosures, especially around time-barred and medical debt.
Public Feedback and Revisions
Following a public hearing on the revised proposal in November 2023, the Department incorporated additional changes based on stakeholder input. Key revisions include:
– Clarified Record-Keeping: Debt collectors are now required to maintain records only on consumer complaints that have been directly reported to them.
– Enhanced Definitions: Terms like “debt collector” and “itemization reference date” are clarified to include both organizations and individuals.
– Updated Communication Rules: Limits on communication frequency apply per consumer, and specific rules govern electronic and workplace communications.
Next Steps
With the new implementation date of April 1, 2025, debt collectors have additional time to ensure compliance with these comprehensive revisions, which are designed to both modernize debt collection practices and enhance protections for consumers. For more details, including the latest updates on these regulations, consider attending the November 7 webinar or reviewing the official notice of the implementation date change.
Author: Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
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