SCOPE OF NEW YORK CITY DEBT COLLECTION AGENCIES ORDINANCE COULD BE EXPANDED
The New York City Council has introduced a bill to include passive debt buyers within the scope of the New York City Debt Collection Agencies ordinance (“DCA”) and to limit its exemption for attorneys. The DCA currently regulates and requires a license of any person acting as a “debt collection agency,” which is defined as a person engaged in business the principal purpose of which is to regularly collect or attempt to collect debts owed or due or asserted to be owed or due to another. New York City, N.Y., Admin. Code §§ 20-489(a), 20-490. The DCA expressly exempts attorneys collecting debts. Id. § 20-489(a)(5). The New York City Department of Consumer Affairs opined earlier this year that regulated “debt collection agencies” include purchasers or assignees of defaulted debt whose principal purpose is the collection of that debt, whether for itself or others, but do not include debt buyers that merely purchase or acquire defaulted debts and do not engage in collection activities. 2007 Introduction No. 660, however, would expand the scope of the DCA by (i) revising the definition of “debt collection agency” to include a buyer of debt who refers such debt to another for collection or to an attorney-at-law for litigation in order to collect such debt and (ii) limiting the DCA’s attorney exemption to include only those attorneys or law firms that collect debts through legal activities such as the filing and prosecution of lawsuits as distinct from attorneys or law firms who regularly engage in activities traditionally associated with debt collection, including, but not limited to, sending demand letters or making collection telephone calls.
- Chuck Gall and Mike Tomkies