A Notice of Proposed Rule Making, ID no. DFS-50-21-00016-P, published in the December 15, 2021 issue of the State Register and pertaining to Debt Collection by Third-Party Debt Collectors and Debt Buyers was inadvertently published with a summary indicating the addition of a new section 1.9. This section was not intended to be included in the proposed rule making and does not appear in the full text of the rule which the Department of Financial Services has posted at https://www.dfs.ny.gov/industry_guidance/regulations/proposed_fsl. The full text of the summary is being republished as follows:

Substance of proposed rule (Full text is posted at the following State website: https://www.dfs.ny.gov/industry_guidance/regulations/proposed_fsl): Section 1.1 provides definitions of terms, including new definitions for the terms, “communication,” “creditor,” and “electronic communication,” and modifications to the definitions for the terms, “charge-off,” “debt,” and “debt collector.”

Section 1.2 describes the content of and manner in which debt collectors must make required disclosures to consumers when debt collectors initiate collection. This section describes the validation notice a debt collector must provide to consumers within five days after its initial communication with the consumer unless the initial communication was in writing and contained the required information. In addition to information required by 12 C.F.R. 1006.34(c) the validation notice must include the type of reference date relied upon by the debt collector; the account number or truncated account number associated with the debt; the merchant brand, affinity brand, or facility name, associated with the debt; the date of last payment or partial payment, if any,; and the applicable statute of limitations for the debt. This section also requires that the debt collector inform the consumer that the consumer has the right to dispute the validity of the alleged debt and describe how to do so.

Section 1.3 sets forth the form and content of disclosures that must be made by a debt collector to a consumer when the debt collector has determined or has reason to know that the statute of limitations has expired for a debt that the debt collector is pursuing. This section also introduces new limits on debt collectors’ telephone and other oral communications with consumers relating to time-barred debt.

Section 1.4 relates to substantiation and consumer disputes of alleged debts . The proposed rule newly requires that any dispute made either orally or in writing shall be treated as a request for substantiation unless the debt collector has already provided substantiation. It also requires that the substantiation be made in hard copy unless the consumer has requested it be made in another form pursuant to applicable law or regulation. This section also requires that the debt collector provide substantiation materials beyond a statement describing complete chain of title when the consumer requests such material. Finally, this section modifies the document retention period for records of a debt for which a consumer has requested substantiation: seven years or until the debt is discharged, sold, or transferred, whichever is longer.

Section 1.5 establishes debt payment procedures. Section 1.5(c) is modified to provide that when a debt collector receives payment satisfying a consumer’s debt, the debt collector must include in the written confirmation of the satisfaction of the debt the name of the creditor to which the debt was originally owed unless otherwise stipulated in an agreement filed in court.

Section 1.6 governs communication to consumers by debt collectors. Updates and clarifications establish that a consumer must consent in writing directly to the debt collector for a debt collector to correspond with the consumer in connection with the collection of any debts by more than one telephone call and three attempted telephone calls per seven-day period per account, unless additional communication is required under Part 1 or other federal or state law, or the communication is made in response to the consumer’s request to be contacted. The amended Section 1.6 also includes new provisions establishing that debt collectors may correspond with a consumer through electronic modes of communication only with the consent of the consumer and via the particular mode of communication elected by the consumer, and using contact information provided specified by the consumer. The provisions also mandate that communication must be private, direct to the consumer, and made through a mode and in a form reasonably expected to ensure compliance with 15 U.S.C. § 1692c. Finally, consent to receive electronic communication must be revocable.

Section 1.7 describes the regulation’s relationship to other laws, including that it does not preempt any procedure required by law or court administrative rule with respect to debt collection. It also provides that the regulation does not preempt any local law if the local law affords greater protection to consumers than the regulation.

New Section 1.8 is a severability clause.