Debt Collection Practices

Federal legislation, New York State law and New York City regulations prohibit abusive, deceptive and unfair debt collection practices by debt collectors. Unfortunately, while many debt collection agencies operate within the law, there are still some companies that use unfair and illegal tactics to try to collect debts, and consumers should know their rights in such situations.

What Debts Are Covered by Debt Collection Laws? 

Personal, family, and household debts are covered, such as money owed for the purchase of a car, for medical care or for charge accounts.

What Is a Debt Collector? 

A debt collector is an individual who, as part of his or her job, regularly collects debts for others. Under federal law, this usually does not include your creditor, but only applies to third party debt collectors.

In New York City, this definition is extended to include anyone whose job is to collect debts for others. These individuals may work for the creditors themselves, for example, in the collection departments of stores, hospitals, doctors or lawyers offices. 

Any business that engages in collecting personal or household debts from New York City residents is required to be licensed by the NYC Department of Consumer Affairs.  To search for a licensee, visit

How May a Debt Collector Make Contact? 

A debt collector may contact you in person, by mail or telephone. However, in connection with the collection of the debt, a debt collector cannot contact you under the following circumstances without prior approval by you or a court:

  • Under New York State and New York City law, at any unusual or inconvenient time such as before 8:00 AM or after 9:00 PM.
  • At any unusual or inconvenient place, or at your job if your employer prohibits such communication.
  • With excessive frequency. More than twice during seven days is excessively frequent. This does not include communications made in response to communications from you.
  • If the debt collector knows the consumer is represented by an attorney with respect to the debt.

Who May a Debt Collector Contact Concerning a Debt? 

Generally, debt collectors may not communicate with any person about your debt other than you or your attorney without getting your written consent or your attorney's consent except to find out where you live and work, for the purpose of establishing contact with you. A debt collector may only identify themselves and state that they are seeking location information.

In trying to locate you, a debt collector must not tell anybody that you owe money (in most cases), talk to any person more than once (in most cases), use a post card, or put anything on an envelope or in a letter or telegram that identifies the writer as a debt collector.

A debt collector may contact a consumer reporting agency, the creditor, the creditor's attorney, an attorney representing you, or the debt collector's employers or attorney about your debt without getting your consent.

What is the Debt Collector Required to Tell You About the Debt? 

Within five days of contacting you for the first time, the debt collector must send you a written notice containing the following information (unless all this information is included in the initial communication):

  • The amount of money you owe,
  • The name of the creditor to whom you owe the money,
  • A statement that unless you, within 30 days after the receipt of the notice, dispute the validity of the debt, the debt will be assumed to be valid by the debt collector,
  • A statement that if you notify the debt collector in writing within the 30 day period at the address designated by the debt collector in the notice that the debt is disputed, that the debt collector will obtain verification of the debt and a copy of such verification will be mailed to you.
  • A statement that upon your written request within the 30 day period, the debt collector will provide you with the name and address of the original creditor, if different from the current creditor,
  • An address to which you should send any communication which disputes the validity of the debt or any portion of it or any communication requesting the name and address of the original collector.

Can a Debt Collector Be Stopped From Making Contact? 

Yes, you may stop a debt collector from contacting you by saying so in writing. Once you tell a debt collector not to contact you, the debt collector can no longer do so, except to tell you in writing that there will be no further contact or to tell you that some specific action may be taken. Also, federal law states that a debt collector may not contact you if you send the collection agency a letter stating you do not owe money within 30 days after you are first contacted. However, a debt collector can renew collection efforts if you are sent proof of the debt.  In addition, even if direct collection contact is stopped, a debt collector may still attempt to take legal action against you in a court of law.  Consumers should respond immediately to legal notices regarding potential court actions involving debt collection.  Ignoring a lawsuit notice in a debt collection case may result in a default judgment being entered against the targeted consumer, even when a debt may not actually be owed.

What Types of Debt Collection Practices Are Prohibited? 

A debt collector may not harass you. For example, a debt collector may not:

  • Use violence or threats of violence to harm your property or reputation,
  • Publish a list of consumers which says you refuse to pay your debts (except to a credit bureau),
  • Use obscene or profane language,
  • Repeatedly use the telephone to annoy you,
  • Advertise your debt.

A debt collector may not use false statements when collecting a debt. For example, the debt collector may not:

  • Under New York State and New York City law, falsely imply that a debt collector represents the government or is an attorney,
  • Falsely imply that you committed a crime,
  • Falsely represent that the debt collector operates or works for a credit bureau,
  • Misrepresent the amount of the debt,
  • Represent that papers being sent are legal forms, such as a summons, when they are not or that they are not legal forms when they are.
  • Disclose or threaten to disclose information about you that the debt collector knows is false.

Also, a debt collector may not say:

  • That you will be arrested or imprisoned if you do not pay your debt,
  • That he/she will seize, garnish, attach or sell your property or wages, unless he/she intends to do so legally,
  • That any action will be taken against you which cannot be taken legally.

A debt collector may not:

  • Give false credit information about you to anyone,
  • Send anything that looks like an official document which might be sent by any court or government agency,
  • Use any false name.

A debt collector must not be unfair in attempting to collect any debt. For example, the debt collector cannot:

  • Collect any amount greater than the amount of your debt, unless allowed under New York State and New York City law,
  • Make you accept collect calls,
  • Deposit a post-dated check early,
  • Put anything on an envelope other than the collector's address and name. Even a company name cannot be used if it indicates that the communication is about the collection of a debt.

What Control Do You Have Over Specific Debts? 

If you owe several debts, any payment you make must be applied as you choose. A debt collector cannot apply a payment to any debt you feel you do not owe. 

What Can You Do If the Debt Collector Breaks the Law? 

Remember: While the law now protects you against illegal debt collection practices, it does not relieve you of your responsibility to pay your debts. Nor does violation of the law by the debt collector relieve you of your obligation to pay. You may be able to sue the debt collector for violation of the law, but you still have to pay what you owe.

Also, realize that certain debt collection practices are legal. As stated above, the debt collector may contact people you know and work with in order to locate you. And, providing these provisions are in your contract, the debt collector may be able to levy delinquency charges against you, charge you collection costs; and under certain circumstances accelerate your payment schedule.

For further BBB information about how to manage debt-related issues, click here.

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