Consumer Finance Insights
September 17, 2020

New York Department of Financial Services Files Charges Against Debt Collector for Failing to Substantiate Debts

On September 16, 2020, the New York Department of Financial Services (“DFS”) announced it filed a statement of charges against a debt collector over the debt collector’s alleged failure to comply with New York State’s Debt Collection Regulation, Part 1 of Title 23 of the New York Codes, Rules, and Regulations.  According to the statement of charges, the debt collector did not honor requests by consumers for substantiation of debt, i.e., information proving the validity of the debt and the collector’s right to collect the debt.  The statement of charges is the first public enforcement action under a recently-enacted New York regulation that requires a debt collector to provide substantiation of debts to consumers within 60 days of any such request, and describes the particular kinds of documentation a debt collector must provide to substantiate the debt.  DFS alleges that each failure of the debt collector to substantiate a consumer’s debt constitutes a separate violation carrying up to $1,000 in penalties.