Legislative changes affecting consumer collections for consumer credit transactions recovery went into effect in 2022 largely as a result of the Consumer Credit Fairness Act (CCFA). The reforms were then codified into law through updates to the Civil Practice Law and Rules of New York. As a result, the law specifies documents required to file a consumer debt collection case in New York.
Understanding the new laws will help you update your document retention practices in the event you need to file a consumer debt collection case to collect unpaid bills.
Documents Needed to File
Any case filed in the New York courts which seeks to recover unpaid balances for consumer credit transactions must include specific documentation and information not previously required. You should attach the following items to the complaint when filing your case:
- Underlying contract or agreement
- Most recent invoice or statement recording a purchase transaction
- Most recent statement of account that indicates the balance due
If the account was a revolving credit account, the charge-off statement may be attached instead of the agreement.
Specific language in the text of the complaint must include:
- The last four digits of the account number printed on the most recent monthly statement recording a purchase transaction,
- The date and amount of the last payment, or if none, a statement that no payment was made
- the date the final statement of account was provided to the defendant
The amount sought to recover must be itemized and broken down as follows:
- Principal
- Finance charges
- Fees imposed by the original creditor
- Collection costs
- Attorney’s fees
- Interest
- Any other fees
You must include the aforementioned even if they are not part of the balance. Instead, you can list them as zero balance.
If the Account was a revolving credit account, the complaint must include:
- The total amount of debt as of charge off
- The total amount of non-interest charges or fees since charge off
- The total amount of payments and/or credits made on the debt since charge off
- The total amount of payments/credits made on the debt since charge off
Changes to Recovery
Imputed Interest: The legal rate of interest was reduced from 9% to 2% thereby reducing additional interest awarded to a creditor in a consumer case.
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