New debt collection rules creating requirements relating to consumers’ language proficiency are set to take effect in New York City on June 27, 2020. The new rules amend NYC’s existing debt collection regulations applicable to creditors collecting their own debts as well as third-party collection agencies. Accordingly, the new rules appear to have implications for creditors and debt collectors alike with respect to any collection activities involving NYC consumers.
Specifically, the new rules require “debt collectors” (defined to include both creditors and collection agencies) to request, record, and retain, to the extent reasonably possible, a record of the language preference of each consumer from whom the debt collector attempts to collect a debt. Failure to request and record this information after the institution of debt collection procedures will be considered an unfair or unconscionable means to collect or attempt to collect a debt under the rules. The rules also require debt collection agencies to furnish a report at least annually to the Department of Consumer Affairs (DCA) identifying (1) by language, the number of consumer accounts on which an employee of the collector attempted to collect a debt in a language other than English, and (2) the number of employees that attempted to collect on such accounts. This reporting requirement appears to apply only to third-party debt collection agencies (and not creditors), as defined under NYC’s collection regulations.
Regarding language access services, the new rules require debt collectors (again, both creditors and collection agencies) to include on any public-facing websites maintained by the debt collector, information regarding the availability of any language access services provided by the debt collector and a statement that a translation and description of commonly-used debt collection terms is available in multiple languages on the DCA’s website. Further, debt collection agencies (but not creditors or third-parties collecting in the creditor’s name) must make these same disclosures in their initial communication with the consumer or, if not in the initial communication, in the validation notice sent to the consumer. Additionally, the new rules prohibit debt collectors from (1) providing false, inaccurate, or incomplete translations of any communication to a consumer in the course of attempting to collect a debt when the debt collector provides translation services, and (2) misrepresenting or omitting a consumer’s language preference when returning, selling, or referring for litigation any consumer account, where the debt collector is aware of such preference.
The DCA announced that it was proposing the rule changes in a March 5, 2020 press release, at which time it also announced the opening of a comment period that would expire on April 10, 2020. The press release also announced that a hearing on the proposed rule changes would take place on April 10, 2020. No comments were received and given that NYC was in the midst of a complete lock down in April due to the COVID-19 pandemic, it is unclear if anyone attended the hearing.
On June 11, 2020, several industry trade associations, including Receivables Management Association International, National Creditors Bar Association, New York State Creditors Bar Association, ACA International, and New York State Collectors Association, sent a letter to DCA Commissioner Salas expressing concern about the new rules. The letter objects to the timing of the publication and adoption of the rules given the global pandemic and requests that the DCA postpone the effective date of the rules until three months after the publication of a final rule following an abbreviated reopened comment period to solicit industry and public comments.
The letter also enumerates several areas of concern that require clarification, including:
- Can English be inferred to be a consumer’s preferred language if the debt collector is able to have a conversation in English and the consumer is responding in English?
- If the consumer has more than one language preference, which should be recorded?
- How would a debt collector be able to record a language preference for a consumer who responds to the debt collector’s request for their language preference in a language the debt collector does not speak?
- Will the annual reports be made public on the DCA’s website?
- What is the standard for determining whether a translation is “false, inaccurate, or partial”?
- Does the prohibition against false, inaccurate, or partial translations apply only to communications originally made in English, or does it apply when the communication is in another language in the first instance?
- Regarding the disclosures on public websites, what is considered “clearly and conspicuously”?
In addition to the concerns raised in the trade associations’ letter, it is also unclear whether debt collectors must offer language access support under these new rules, and if so, to what extent. The new rules related to the disclosure of language access services and prohibitions of certain conduct related to those services do not specify whether those services are required. Nor do the rules make clear whether and to what extent collections can continue after a debt collector learns that a consumer has a language preference other than English if the debt collector does not offer services in that language. Can collections continue? Or will the DCA take the position that doing so is unfair or misleading in some way? Is the debt collector’s required disclosure relating to the language resources provided by the DCA sufficient to allow collections to continue?
Hopefully, the DCA will offer further guidance on these (and the many other) questions that arise as a result of the new rules in order to enable those engaged in collection efforts involving NYC consumers to ensure they are able to do so in a compliant way.