§ 5-77 Unconscionable and Deceptive Trade Practices.
It is an unconscionable and deceptive trade practice for a debt collector to attempt to collect a debt owed, due, or asserted to be owed or due except in accordance with the following rules:
(a) Acquisition of location information. Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer in order to collect a debt, after the institution of debt collection procedures shall:
(1) identify himself or herself, state that he or she is confirming or correcting location information about the consumer and identify his or her employer when that identification connotes debt collection only if expressly requested;
(2) not state or imply that such consumer owes any debt;
(3) not communicate more than once, unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information; for the purposes of this paragraph (3), the debt collector need not count as a communication returned unopened mail or a message left with a party other than the person the debt collector is attempting to reach in order to acquire location information about the consumer, as long as the message is limited to a telephone number, the name of the debt collector and a request that the person sought telephone the debt collector;
(4) not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt; provided that a debt collector may use his or her business name or the name of a department within his or her organization as long as any name used does not connote debt collection; and
(5) if the debt collector knows the consumer is represented by an attorney with regard to the subject debt and if the debt collector has knowledge of the attorney's name and address or can readily ascertain such attorney's name and address, not communicate with any person other than that attorney for the purpose of acquiring location information about the consumer unless the attorney fails to provide the consumer's location within a reasonable period of time after a request for the consumer's location from the debt collector and:
(i) informs the debt collector that he or she is not authorized to accept process for the consumer; or
(ii) fails to respond to the debt collector's inquiry about the attorney's authority to accept process within a reasonable period of time after the inquiry. The employer of a debt collector may not be held liable in any action brought under 6 RCNY § 5-77(a)(3) or (5) if the employer shows by a preponderance of the evidence that the violation was not intentional and resulted despite the maintenance or procedures reasonably adapted to avoid any such violation.
(b) Communication in connection with debt collection. A debt collector, in connection with the collection of a debt, shall not:
(1) After institution of debt collection procedures, without the prior written consent of the consumer given directly to the debt collector after the institution of debt collection procedures, or without permission of a court of competent jurisdiction, communicate with the consumer in connection with the collection of any debt;
(i) at any unusual time or place known, or which should be known, to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock ante meridian and before 9 o'clock post meridian time at the consumer's location;
(ii) if the debt collector knows the consumer is represented by an attorney with respect to such debt and if the debt collector has knowledge of the attorney's name and address or can readily ascertain such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer, except any communication which is required by law or chosen from among alternatives of which one is required by law is not hereby prohibited;
(iii) at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer or supervisor prohibits the consumer from receiving such a communication; or
(iv) with excessive frequency. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that more than twice during a seven-calendar-day period is excessively frequent. In making its calculation, the debt collector need not include any communication between a consumer and the debt collector which is in response to an oral or written communication from the consumer, or returned unopened mail, or a message left with a party other than one who is responsible for the debt as long as the message is limited to a telephone number, the name of the debt collector and a request that one who is responsible for the debt telephone the debt collector; or any communication which is required by law or chosen from among alternatives of which one is required by law. The employer of a debt collector may not be held liable in any action brought under 6 RCNY § 5-77(b)(1)(ii)-(iv) if the employer shows by a preponderance of the evidence that the violation was not intentional and resulted despite maintenance of procedures reasonably adapted to avoid any such violation.
(2) In order to collect a debt, and except as provided by 6 RCNY § 5-77(a), communicate with any person other than the consumer, his or her attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, a debt collector to whom or to whose employer the debt has been assigned for collection, a creditor who assigned the debt for collection, the attorney of that debt collector, or the attorney for that debt collector's employer, without the prior written consent of the consumer given directly to the debt collector after the institution of debt collection procedures, or without the prior written consent of the consumer's attorney or without the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy.
(3) Communicate with any person other than the consumer's attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, a debt collector to whom or to whose employer the debt has been assigned for collection, a creditor who assigned the debt for collection, or the attorney of that debt collector or the attorney for that debt collector's employer in a manner which would violate any provision of this part if such person were a consumer.
(4) After institution of debt collection procedures, communicate with a consumer with respect to a debt if the consumer has notified the debt collector in writing that the consumer wishes the debt collector to cease further communication with the consumer with respect to that debt, except that any communication which is required by law or chosen from among alternatives of which one is required by law is not hereby prohibited. The debt collector shall have a reasonable period of time following receipt by the debt collector of the notification to comply with a consumer's request, except that any debt collector who knows or has reason to know of the consumer's notification and who causes further communication shall have violated this provision. The debt collector may, however:
(i) communicate with the consumer once in writing:
(A) to advise the consumer that the debt collector's further efforts are being terminated or;
(B) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or;
(C) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specific remedy if that is a remedy he is legally entitled to invoke and if he actually intends to invoke it; and
(ii) respond to each subsequent oral or written communication from the consumer.
(5) For the purpose of 6 RCNY § 5-77(b)(1)-(4), the term "consumer" includes the consumer's parent (if the consumer is a minor), guardian, executor, administrator, spouse (unless the debt collector knows or has reason to know that the consumer is legally separated from or no longer living with his or her spouse), or an individual authorized by the consumer to make purchases against the account which is the subject of the collection efforts. A request that the debt collector cease further communication, provided for under 6 RCNY § 5-77(b)(4), if made by the consumer's spouse or an individual authorized by the consumer to make purchases against the account, only affects the debt collector's ability to communicate further with the person making the request.
(c) Harassment or abuse. A debt collector, in connection with the collection of a debt, shall not engage in conduct the natural consequence of which is to harass, oppress or abuse any person in connection with a debt. Such conduct includes:
(1) the use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person;
(2) the use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader;
(3) the advertisement for sale of any debt to coerce payment of the debt;
(4) causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number;
(5) the publication of a list of consumers who allegedly refuse to pay debts, except to another employee of the debt collector's employer or to a consumer reporting agency or to persons meeting the requirements of 15 U.S.C. § 1681a(f) or 15 U.S.C. § 1681b(3); or
(6) except as provided by 6 RCNY § 5-77(a), the placement of telephone calls without meaningful disclosure of the caller's identity.
(d) False or misleading representations. A debt collector, in connection with the collection of a debt, shall not make any false, deceptive, or misleading representation. Such representations include:
(1) the false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform or facsimile thereof;
(2) the false representation or implication that any individual is an attorney or any communication is from an attorney;
(3) the representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to pursue such action;
(4) the threat to take any action that cannot legally be taken or that is not intended to be taken;
(5) the false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to:
(i) lose any claim or defense to payment of the debt; or
(ii) become subject to any practice prohibited by this part;
(6) the false representation of implication made in order to disgrace the consumer that the consumer committed any crime or other conduct;
(7) the false representation or implication that accounts have been turned over to innocent purchasers for value;
(8) the false representation or implication that documents are legal process;
(9) the false representation or implication that documents are not legal process forms or do not require action by the consumer;
(10) the false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by 15 U.S.C. § 1681a(f);
(11) the use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval;
(12) the use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer;
(13) the use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization, unless the general public knows the debt collector's business, company or organization by another name and to use the true name would be confusing;
(14) after institution of debt collection procedures, the false representation of the character, amount or legal status of any debt, or any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt, except that the employer of a debt collector may not be held liable in any action brought under this provision if the employer shows by a preponderance of the evidence that the violation was not intentional and occurred despite the maintenance of procedures reasonably adapted to avoid any such violation;
(15) except as otherwise provided under 6 RCNY § 5-77(a) and except for any communication which is required by law or chosen from among alternatives of which one is required by law, the failure to disclose clearly in all communications made to collect a debt or to obtain information about a consumer, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose;
(16) the use of any name that is not the debt collector's actual name; provided that a debt collector may use a name other than his actual name if he or she uses only that name in communications with respect to a debt and if the debt collector's employer has the name on file so that the true identity of the debt collector can be ascertained;
(17) any conduct proscribed by New York General Business Law §§ 601(1), (3), (5), (7), (8), or (9);
(18) the false, inaccurate, or partial translation of any communication when the debt collector provides translation services; or
(19) the false representation or omission of a consumer's language preference when returning, selling or referring for litigation any consumer account, where the debt collector is aware of such preference.
(e) Unfair practices. A debt collector may not use any unfair or unconscionable means to collect or attempt to collect a debt. Such conduct includes:
(1) the collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law;
(2) the solicitation or use by a debt collector of any postdated check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution;
(3) causing charges to be made to any person for communications by misrepresentation of the true purpose of the communication. Such charges include collect telephone calls and telegram fees;
(4) taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if:
(i) there is no present right to possession of the property claimed as collateral;
(ii) there is no present intention to take possession of the property; or
(iii) the property is exempt by law from such dispossession or disablement;
(5) after institution of debt collection procedures, when communicating with a consumer by use of the mails or telegram, using any language or symbol other than the debt collector's address on any envelope, or using any language or symbol that indicates the debt collector is in the debt collection business or that the communication relates to the collection of a debt on a postcard, except that a debt collector may use his or her business name or the name of a department within his or her organization as long as any name used does not connote debt collection;
(6) after institution of debt collection procedures, communicating with a consumer regarding a debt without identifying himself or herself and his or her employer or communicating in writing with a consumer regarding a debt without identifying himself or herself by name and address and in accordance with 6 RCNY § 5-77(e)(5); or
(7) after institution of debt collection procedures, if a consumer owes multiple debts of which any one or portion of one is disputed, and the consumer makes a single payment with respect to such debts:
(i) applying a payment to a disputed portion of any debt; or
(ii) unless otherwise provided by law or contract, failing to apply such payments in accordance with the consumer's instructions accompanying payment. If payment is made by mail, the consumer's instructions must be written. Any communication by a creditor made pursuant to 6 RCNY § 5-77(e)(7)(ii) shall not be deemed communication for the purpose of 6 RCNY § 5-77(b)(1)(iv). The employer of a debt collector may not be held liable in any action brought under 6 RCNY § 5-77(e)(7) if the employer shows by a preponderance of the evidence that the violation was not intentional and resulted despite maintenance of procedures reasonably adapted to avoid any such violation;
(8) engaging in any conduct prohibited by New York General Business Law §§ 601(2) or (4); or
(9) after institution of debt collection procedures, collecting or attempting to collect a debt without first requesting and recording the language preference of such consumer.
(f) Validation of debts.
(1) Upon acceleration of the unpaid balance of the debt or demand for the full balance due, the following validation procedures shall be followed by debt collectors who are creditors or who are employed by creditors as defined by 15 U.S.C. § 1602(f) (Truth in Lending Act) but who are not required to comply with 15 U.S.C. § 1637(a)(8) (Fair Credit Billing Act), and who do not provide consumers with an opportunity to dispute the debt which is substantially the same as that outlined in 15 U.S.C. § 1637(a)(8) and regulations promulgated thereunder: Within five days of any further attempt by the creditor itself to collect the debt, it shall send the customer a written notice containing:
(i) the amount of the debt;
(ii) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed valid by the debt collector;
(iii) a statement that, if the consumer notifies the debt collector in writing within the thirty-day period at the address designated by the debt collector in the notice, that the debt, or any portion thereof is disputed, the debt collector shall either:
(A) make appropriate corrections in the account and transmit to the consumer notification of such corrections and an explanation of any change and, if the consumer so requests, copies of documentary evidence of the consumer's indebtedness; or
(B) send a written explanation or clarification to the consumer, after having conducted an investigation, setting forth to the extent applicable the reason why the creditor believes the account of the consumer was correctly shown in the written notice required by 6 RCNY § 5-77(f)(1) and, upon the consumer's request, provide copies of documentary evidence of the consumer's indebtedness. In the case of a billing error where the consumer alleges that the creditor's billing statement reflects goods not delivered in accordance with the agreement made at the time of the transaction, a creditor may not construe such amount to be correctly shown unless it determines that such goods were actually delivered, mailed, or otherwise sent to the consumer and provides the consumer with a statement of such determination.
(iv) if the debt collector is not the original creditor, a statement that, upon the consumer's written request within the thirty-day period, sent to the address designated by the debt collector in the notice, the debt collector will provide the consumer with the name and address of the original creditor;
(v) an address to which the consumer should send any writing which disputes the validity of the debt or any portion thereof or any writing requesting the name and address of the original creditor.
(2) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector who is not a creditor and not employed by a creditor shall, unless the following information is contained in an initial written communication, or the consumer has paid the debt, send the consumer a written notice containing:
(i) the amount of the debt;
(ii) the name of the creditor to whom the debt is owed;
(iii) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(iv) a statement that if the consumer notifies the debt collector in writing within the thirty-day period at the address designated by the debt collector in the notice that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector;
(v) a statement that, upon the consumer's written request within the thirty-day period sent to the address designated by the debt collector in the notice, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor;
(vi) an address to which the consumer should send any writing which disputes the validity of the debt or any portion thereof or any writing requesting the name and address of the original creditor;
(vii) a statement informing the consumer of any language access services available, including whether the consumer may obtain from the debt collector a translation of any communication into a language other than English; and
(viii) a statement that a translation and description of commonly-used debt collection terms is available in multiple languages on the Department's website, www.nyc.gov/dca.
(3) If, pursuant to 6 RCNY §§ 5-77(f)(1) or 5-77(f)(2) of this Regulation the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall not attempt to collect the amount in dispute until the debt collector obtains and mails to the consumer verification of the debt or a copy of the judgment or the name and address of the original creditor. The debt collector shall maintain for one year from the date the notice was mailed, records containing documentation of the date such notice was mailed, the date the response, if any, was received and any action taken following such response.
(4) The failure of a consumer to dispute the validity of a debt under 6 RCNY § 5-77(f) shall not be construed by any court as an admission of liability by the consumer.
(g) Liability. The employer of a debt collector is liable for the debt collector's violation of 6 RCNY § 5-77. A debt collector who is employed by another to collect or attempt to collect debts shall not be held liable for violation of 6 RCNY § 5-77.
(h) Public websites. Any debt collector that maintains a website accessible to the public must clearly and conspicuously disclose on such website:
(1) a statement informing the consumer of any language access services available, including whether the consumer may obtain from the debt collector a translation of any communication into a language other than English; and
(2) a statement that a translation and description of commonly-used debt collection terms is available in multiple languages on the Department's website, www.nyc.gov/dca.
(Amended City Record 5/28/2020, eff. 6/27/2020)
