New York Codes, Rules and Regulations
Title 23 - FINANCIAL SERVICES
Chapter I - Regulations of the Superintendent of Financial Services
Part 1 - DEBT COLLECTION BY THIRD-PARTY DEBT COLLECTORS AND DEBT BUYERS
Section 1.4 - Substantiation of consumer debts

Universal Citation: 23 NY Comp Codes Rules and Regs ยง 1.4

Current through Register Vol. 46, No. 39, September 25, 2024

(a) If a consumer disputes, orally or in writing, the validity of a charged-off debt or the right of the debt collector to collect on a charged-off debt, the debt collector must inform the consumer that the consumer may request substantiation of the debt, unless the debt collector has already provided the consumer the information required in this section. The debt collector may treat such dispute as a request for substantiation, or:

(1) If the consumer disputes the debt orally, the debt collector must:
(i) make reasonable efforts to inform the consumer, in the conversation in which the dispute was communicated, how the consumer can make a written request for substantiation of the debt in writing; and

(ii) within 14 days of the consumer disputing the debt, provide the consumer clear and conspicuous written instructions on how to request substantiation of the debt; or

(2) If the consumer disputes the debt in writing, within 21 days of the debt collector receiving that writing, the debt collector must provide the consumer clear and conspicuous written instructions on how to request substantiation of the debt.

(b) A debt collector must provide the consumer written substantiation of a charged-off debt within 60 days of receiving a request for substantiation of the debt and must cease collection of the debt until written substantiation has been provided to the consumer. A debt collector must substantiate a charged-off debt pursuant to this section only once during the period that the debt collector owns or has the right to collect the debt.

(c) Substantiation of a charged-off debt shall include:

(1) the signed contract or signed application that created the debt or, if no signed contract or application exists, a copy of a document provided to the alleged debtor while the account was active, demonstrating that the debt was incurred by the debtor. For a revolving credit account, the most recent monthly statement recording a purchase transaction, payment or balance transfer shall be deemed sufficient to satisfy this requirement;

(2) the charge-off account statement, or equivalent document, issued by the original creditor to the consumer;

(3) a statement describing the complete chain of title from the original creditor to the present creditor, including the date of each assignment, sale, and transfer; and

(4) records reflecting the amount and date of any prior settlement agreement reached in connection with the debt pursuant to section 1.5 of this Part.

(d) If a consumer requests substantiation of a charged-off debt pursuant to subdivision (a) of this section, the debt collector must retain the following documentation until the debt is discharged, sold, or transferred:

(1) evidence of the consumer's request for substantiation; and

(2) all documents the debt collector provided in response to the request.

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