New York Adopts Amendments Addressing Collection of Family Member Debts

Just a few days before the end of 2018 New York Governor Cuomo signed into law the Senate Bill 3491A, which adds amendments to the state’s General Business Law (GBL). The amendments address the collection of family debts and are scheduled to go into effect on March 29, 2019.

While the original intention of the amendments was to address the collection of a deceased family member’s debts, they are drafted more broadly. They prohibit “principal creditors and debt collection agencies” from: (a) making any representation that a person is required to pay the debt of a family member in a way that contravenes the FDCPA; and (b) making any misrepresentation about the family member’s obligation to pay such debts.

The original statute’s definition of “principal creditor” is “any person, firm, corporation or organization to whom a consumer claim is owed, due or asserted to be due or owed, or any assignee for value of said person, firm, corporation or organization.” The amendments specifically define a “debt collection agency” as “a person, firm or corporation engaged in business, the principal purpose of which is to regularly collect or attempt to collect debts: (A) owed or due or asserted to be owed or due to another; or (B) obtained by, or assigned to, such person, firm or corporation, that are in default when obtained or acquired by such person, firm or corporation.” 

See Barbara S. Mishkin, New York Adopts Amendments Addressing Collection of Family Member Debts, National Law Review, January 10, 2019.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.