The city of Yonkers, New York, enacted General Ordinance No. 16-2014 to amend its Consumer Protection Code (“Code”) by adding new requirements for debt buyers and collection agencies.  The revised Code includes the following sections: definitions, license requirements, required collection practices, prohibited collection practices, and penalties for non-compliance.  The new Code requirements became effective on December 12, 2014.

The modified Code gives new definitions to important terms such as “consumer,” “debt,” and “person.”  The definition of “debt collection agency” now includes buyers of delinquent debts (both active and passive buyers) and excludes attorneys so long as they are acting in a legal capacity.

The Code contains new requirements for communications with consumers and payment arrangements, which are identical to the requirements already in place in New York City.  A debt collection agency is required to include the following in all communications with consumers:

  • A call-back number to a phone that is answered by a live person;
  • The name of the collection agency;
  • The originating creditor of the debt;
  • The name of the person to call back; and
  • The amount of the debt at the time of the communication.

Agencies also are required, within five days, to confirm in writing to the consumer any debt payment schedule or settlement agreement reached regarding the debt.

The revised Code also imposes new requirements regarding verification of consumer debts and disclosures for debts where the statute of limitations has expired.  A debt collection agency may not attempt to collect or contact a consumer regarding a debt after the consumer requests verification of a debt, until the agency provides the consumer with written documentation identifying the creditor who originated the debt, and an itemization of the principal balance of the debt that remains due and all other charges that are due or alleged to be due.  Unlike the verification requirements found in the FDCPA, this requirement does not limit verification requests to a 30-day period.

Unless an agency first provides a consumer with information about his or her legal rights, it is prohibited from contacting a consumer or attempting to collect a debt in which the statute of limitations for initiating legal action has expired.  The Code does not contain a model disclosure for how to inform a consumer about their legal rights.