In our previous post, we discussed the New York City Department of Consumer and Worker Protection’s (NYC DCWP) decision to delay the enforcement of the amended debt collection rules from December 1, 2024, to April 1, 2025. This postponement was in response to industry concerns and a legal challenge filed by ACA International, Inc. and Independent Recovery Resources, Inc. Since then, NYC DCWP also announced it would delay the effective date for the amended rules to April 1, 2025 to align with the enforcement date.

On November 7, the NYC DCWP held a Q&A session to address industry questions and clarify the newly amended debt collection rules. A significant clarification from this session is that the NYC DCWP intends for the new amendments to apply to creditors collecting their own debts, despite the amended definition of “debt collector.”

The plain language of the amended statute defines a “debt collector” as any person or organization engaged in the business of collecting debts “owed or due to another person.” This wording led many creditors to believe that the amended NYC debt collection rules would no longer be applicable to them. However, during the Q&A, the NYC DCWP acknowledged the “confusion” surrounding the revised definition and stated that they are proposing a narrow amendment to ensure clarity.

The proposed amendment will specifically state that the term “debt collector” includes creditors collecting their own debts. The NYC DCWP estimates that this amendment will be published and finalized by November 12, 2024. This clarification is crucial as it confirms that the scope of the debt collection rules remains unchanged and that all amended rules will apply to creditors collecting their own debts.

We will continue to monitor these developments and provide updates as they become available.