FROM CREDIT CARD TO COURT ROOM:INTRODUCTION TO BASIC CONSUMER LAW

Shanna Tallarico, Esq.General Legal Services Unit

New York Legal Assistance Group (NYLAG)

June 11, 201411:00 a.m. - 12:00 p.m.

CLE Credit:

1 Professional Practice(Transitional and Nontransitional)

AGENDA

11:00 – 11:05 a.m.: Introduction

11:05 – 11:15 a.m.: Debt Buyer Business Model

11:15 – 11:25 a.m.: Life of a Debt

11:25 – 11:35 a.m.: Collections lawsuits: Legal Authority

11:35 – 11:40a.m.: Protected income and EIPA

11:40 – 11:50 a.m.: Defenses

11:50 – 11:55 a.m.: Burden of Proof

11:55 – 12:00 p.m.: Q & A

Materials1. Sample Verification Letter2. Sample Cease Communication Letter3. Collections Communication Log4. How to read a Civil Court Summons5. Consumer Credit Answer Form6. EIPA Flow Chart

1

Introduction to BasicConsumer Law

Presented by:

Shanna Tallarico, Esq.

New York Legal Assistance Group

Wednesday, June 11, 2014

11:00 p.m. – 12:00 p.m.

Training Agenda & Materials

Agenda

1. Why so many debt collectionlawsuits?

2. Debt buyer business model(shady)

3. Life of a Debt

4. Debt Collection LegalAuthority

5. EIPA

6. FDCPA

7. Burden of Proof

8. Defenses

Materials

1. EIPA Flow Chart

2. Sample Cease CommunicationLetter

3. Collection Communications Log

4. Sample Verification Letter

5. Consumer Credit Answer Form

6. How to read a Civil CourtSummons

Litigation Explosion: Debt Buyers

Statistics Don’t Lie:

Debt collection cases = 50% of NYC Civil Court’s caseload

2009 = 241,195 now surpasses # of housing cases filed

Approximately 90% are initiated by debt buyers

A mere 1% of defendants are represented!

Major Player in the Game: The Debt Buyer (DB)

Business that makes large scale purchases of delinquent consumerdebt for a fraction of the debt’s face value.

Credit card, utility debt, gym memberships, auto loans, medical debt

Pay as little as 2 cents on the dollar ($20 for a $1,000 debt).

Have little documentation of sale or other details.

2

Debt Buyer Business Model NOT geared to litigation, but to processing default judgments on a very large scale. Very

efficient paralegals.

No service, bad service, fake affidavits of service

After default judgment freeze bank accounts OR garnish wages OR place lien on home

More likely to sue than original creditor because: Prize: High profits even if small payment, due to low cost.

No worry about bad press (like original creditor).

Do not possess and often cannot even obtain basic legal documentation required to makeout a prima facie case! Obtaining records are impossible. If possible (2%), exceed cost of claim.

To date, no one within the national or NY state consumer advocacy community has heardor seen reported: of a SINGLE DEBT BUYER having managed to prove his/her primafacie case in a collection action.

Linda Klein $2300 CHASE-32240SS#0437 New York

Jeff Simmons $4210 BOA-76606SS#0211 New York

Martin Bodnar $11,000 Citi-33110SS#4290 New York

Julie Morton $22,300 C/ONE-34441SS#5001 New York

The (fascinating) Life of a Debt

What is considered a debt?

A debt is created at the moment the consumer misses apayment to his or her credit card company = default.

report the late payment to the credit bureaus;

assess a late fee;

may raise the interest rate;

may telephone the consumer to inquire about the missed payment.

3

The Life of a Debt (continued)In-House Debt CollectorAfter several missed payments, creditor sends the account to the in-house collections

department. send letters and make telephone calls to the consumer in an effort to collect the debt. range from relatively pleasant to quite nasty (may still be concerned with public image).

Charge Off> 180 days with no payment, creditor will “charge off” debt, or write it off as a bad debt

(tax break!) . Many consumers are confused about what “charge off” means. They still owe the debt! Creditor may continue to assess interest at the rate in credit card contract. Creditor may not charge late fees or over-the-limit fees.

Outside Debt CollectorBefore/after charge-off, creditor sends debt to outside collection agency. Tactics vary. “Flat rate” debt collectors send one/series of collection letters, paid a flat rate by

the collector. Commission debt collectors send letters/make calls to the debtor. Can be more

aggressive. FDCPA governs the debt collection process now, and the consumer gains substantive

rights, such as the right to verify the debt and the right to cease communication.

The Life of a Debt (Continued)

Debt BuyerWhen debt is charged-off and creditor cannot obtain payment through in-house or

third party debt collectors, the creditor will likely sell the debt to a debt buyer. FDCPA applies to debt buyers as well as the outside collection firms they employ. Debt buyers engaging in collection activities in New York City must obtain a debt

collection license from the New York City Department of Consumer Affairs.

Debt Collection Law FirmEventually, if debtor does not make payment, debt may be sent to a debt collection

law firm. Both original creditors and debt buyers use services of debt collection law firms. Typically send a letter/make phone calls to attempt to negotiate a settlement prior

to suit. The FDCPA applies to debt collection law firms. If, during the course of

litigation, the debt collection law firm makes false statements (including falsestatements in legal pleadings) or engages in unfair practices, it may be liable underthe FDCPA.

Legal Authority

The debt collection process is governed by:

CPLR (service, procedure)

Fair Debt Collection Practices Act (FDCPA) Controls what debt collectors may do / say to consumers in the course of

collecting a debt.

New York City rules regulating debt collection. These rules are administeredby the New York City Department of Consumer Affairs, which licenses andregulates debt collectors in New York City. More protective in terms of harassment (remedy)

New York State law also prohibits debt collection harassment. See N.Y. Gen.Bus. Law §600-04. However, state law has no private right of action & notparticularly useful for most New Yorkers.

4

EIPAThe Exempt Income Protection Act

Effective January 1, 2009, N.Y. C.P.L.R. § 5222-a.

Before EIPA: Banks not required to determine if exempt income—just frozeaccount automatically.

Goal: Help protect low-income New Yorkers from seizure of exempt incomeby debt collectors. Banks have to check first.

Common sources of income that are exempt from collection are SocialSecurity, Social Security Disability (SSD), Supplemental Security Income(SSI), Veteran’s Benefits, Unemployment Insurance, payments from pensionsand retirement accounts, and Worker’s Compensation.

A typical bank in NY receives one demand to freeze an account perminute.

Handout: EIPA Flow Chart

EIPA (continued)

Exempt funds directly deposited within 45 days of date therestraining notice was served on the bank the first$2,625 of the account is exempt from restraint.

For accounts without directly deposited exempt incomethe first $1,920 is exempt from restraint.

Banks may not charge fees to account holders if fundscannot be legally restrained. (Amounts over $2,625 or$1,920 will be subject to both restraint and presumablyfees.)

If any funds are restrained, accountholder should receive anotice and an exemption claim form, mailed by the bank. Accountholder must complete the form within 20 days and mail it

back to the judgment creditor’s attorney and the bank, which thentriggers various other procedures (see chart).

FDCPA in (super) Brief

The Fair Debt Collection Practices Act, 15 U.S.C. § 1692,applies to all persons who regularly collect the debts ofanother.

Applies to third party debt collectors, not original creditors.

Applies to consumer debts only – debts incurred forpersonal, family, or household purposes. It does not applyto business debts, parking tickets, or other fines.

Prohibits deceptive or unfair tactics in order to collect on adebt. No false and misleading statements, verbal or written(threat of foreclosure, job loss).

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FDCPA (continued)Harassment? No! Bars collectors from harassing debtors:

Frequent telephone calls, using profanity, or discussing the debt with third parties. Cannot call before 8 am or after 9 pm. Cannot make repeated or continuous calls

with the intent to annoy, harass or abuse any person at the called number.

Practice Tip Person receiving such phone calls should say: “This timeand/or place is inconvenient for me to receive calls. Please stop calling atthis time and/or place.” Triggers FDCPA, has to be obeyed.

New York City Rules define “excessive frequency” as calling someone afterthe debt collector has already spoken with the debtor 2x in a 7 day period. Practice Tip Debtor should answer phone 2x, identify him/herself as

the right person and then hang up. The 3rd time the agency calls back, canbe reported to the NYC Department of Consumer Affairs for violating 6R.C.N.Y. § 5-77(b)(1)(iv).

To stop all contacts, consumer sends “cease communication” letter. Uponreceipt can’t contact consumer by telephone/mail (except once, to tellconsumer that it will cease contact). Possible: file a debt collection lawsuit.

Handout: Sample Cease Communication Letter & CollectionsCommunication Log

FDCPA (continued)

Right to verify the debt: A powerful tool! Within 5 days of a collector’s first communication must send written

notice stating the amount of the debt, the name of the creditor to whichthe debt is owed, and information about how to dispute the debt. (Called a“g notice,” because it is required by 15 U.S.C. § 1692g.)

Consumer then has 30 days from receiving the g notice to request“verification” of the debt. Once the debt collector receives the request forverification, it may not engage in any debt collection activities unless anduntil it verifies the debt.

The actual “verification” required by case law is minimal. However, somedebt collectors will abandon the debt rather than verify it.

Benefit to consumers debt collection activity (including filing a lawsuit)must stop unless and until the debt collector provides verification. (Goodfor debts close to the SOL)

DBs sue anyway—but can use as defense.

Handout: Sample Verification Letter

Prove It.Warn your clients:If they admit that the plaintiff's allegations are correct, plaintiff can use admission to win. But if

challenge plaintiff's right to sue, existence of the debt, or amount of the debt, the plaintifffaces quite a hurdle in proving their case.

What kind of evidence does the plaintiff need to present in order to meet itsburden of proof?

Plaintiff has the right to sue you (standing). For DBs must prove it owns your debt by producing contract of sale, (assignment). Must mention your client’s debt specifically. If debt was bought and sold multiple times,

DB must present chain of assignments going all the way back to original creditor.

Proof that the debt is your client’s original contract with client’s signature.

Proof that the $ demanded is correct. Usually complete set of bills or account statements.

Witness from original creditor (not DB) capable of qualifying the contract/acct statementsunder business records exception. Watch for “robo-signed” affidavits. Docs made in course of regular business Docs contemporaneous with the transaction (not prepared for purpose of litigation)

6

Legal Defenses

SHOW UP! (half—or all—the battle in debt collection cases).

File an answer! They can’t prove their case, may be best toinsist on trial (rare)

Summons personally served 20 days

Summons suitable age and discretion or nail and mail 30 days

Amend as of right before the 20 or 30 day period is up OR within 10days of service of the original Answer.

Serve on Plaintiff’s attorneys, file with Court (with proof of service)Best practice: Get Certificate of Mailing.

Handouts: Consumer Credit Answer Form & How To Read aCivil Court Summons

Defenses (Continued)Improper Service (no personal jurisdiction) Never received the summons and complaint at all, or Service was improper.

NY law: Process server must try to make personal or substitute service (suitableage + mail)

>3 unsuccessful attempts (1 not during business hrs) conspicuous service (nail-and-mail).

MUST RAISE the defense in answer the first time you appear in court + may need tofile Motion to Dismiss within 60 days of filing answer.

May lead to "traverse hearing." Plaintiff can sue again. Decide whether worthwhile todismiss, but always raise it as a defense.

Identity Theft or Mistaken Identity Burden of proof on Plaintiff you made or authorized all charge. A person does

not have to prove that the debt is NOT theirs as they do not have the burden ofproof. Not wise to advise on settlement if the client is a victim of ID theft.

FDCPA counterclaim if previously informed collector that it has the wrong person.

Defendant is only an Authorized User A card that shared with another person who is not a cosigner. Cannot be held legally responsible for that credit card debt.

Defenses (Continued)

Statute of Limitations Runs from the last time you made a payment (default). May get tricked into restarting!

SOL on credit card debt 6 years (NY State Law, CPLR Section 213) Borrowing statute Most banks are domiciled outside of NY State in jurisdictions

with shorter statutes of limitations. SOL on auto loan 4 years (New York State Law, UCC Section 2-725).

Practice Tip: Best practice include a SOL defense in answer unless the litigant is sure thelast payment date is recent (e.g., within the last 2 years).

Practice Tip: If being sued for a very old debt on which he/she made 1 negligible payment in response to repeated harassment or misinformation, use this defense nevertheless. Ifplaintiff’s counsel even knows about it explain the circumstances under which that paymentwas made to the judge.

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Defenses (Continued)

Dispute the Amount of the Debt Most common and easiest to explain. If the client believes amount of debt is incorrect, then the client

should dispute the amount of the debt. Plaintiff has burden of proof:

Must prove that principal, interest, collection costs, andattorneys fees are all correct, agreed to in your contract, andlawfully charged.

Have the right to insist that plaintiff come up with the originalcontract, account statements, and even purchase receipts, toprove the amount of the debt.

Bankruptcy Discharged debtyou do not owe it. Bankruptcy is an absolute

defense to a debt collection lawsuit.

Defenses (Continued)No Business Relationship with Plaintiff (lack of standing) Applies when the plaintiff is DB Has to produce a contract of sale (assignment) that mentions your

client’s debt specifically. Has to provide chain of assignments going all the way back to the

original creditor. Cannot use wikipedia or NYT to prove chain of title. (Palisades

Collection LLC v Graubard 2009)Plaintiff Is Not A Licensed Debt Collector DB only DCA website can perform an “instant license check”The Complaint Does Not Contain A License Number DB only DB required to write its license number in complaint.

Defenses (Well, not technically…)

Defendant Cannot Afford To Pay Include this fact as “additional information” in Answer. Be careful! Could be interpreted as admission that litigant owes the $

claimed.

Defendant’s Only Sources of Income are Exempt From Collection Include this fact as “additional information” in Answer. Advise the litigant that even if the debt collector wins, it will not be

able to collect on the judgment as long as the defendant’s source ofincome continues to be exempt, the client is considered “collectionproof.” Be sure to advise litigants that a judgment is valid for 20 years.

Practice Tip: Do not share Social Security Number with the opposing party. If the SS#necessary to prove that plaintiff is suing the wrong person, tell the litigant to insist thatopposing counsel provide the SSN of the original account holder first. If different, telllitigant to ask Judge to review the papers and make a representation to opposingcounsel without entering the number in a public record. Only provide the last fourof the social security if/when you need to disclose it.

Practice Tip: Look for inconsistencies (default date after charge off date.)

8

Thank you for participating!

Volunteer to represent pro se defendants – help themassert their rights and stop the predatory and unfair

practices of Debt Buyers.

Great experience!

You can win your case, and

you can help consumers get back

on their feet again!

Your Name Your Street Address City, State ZIP Code Date___________________ CERTIFICATE OF MAILING Collection Agency’s Name Collection Agency’s Address City, State ZIP Code Re: Name of Company you owe money to, Account Number : (insert your account number here) Dear Sir/Madam: Please verify the above-referenced debt as required by the Fair Debt Collection Practices Act. Aside from verification of the debt, do not contact me about this debt. The Fair Debt Collection Practices Act, 15 USC Section 1692c requires that you honor this request. Your cooperation will be appreciated. Sincerely, _____________________ (Your name and signature) cc: (Insert Name of Company) Federal Trade Commission – Consumer Response Center New York City Department of Consumer Affairs

Make sure to mail your letter with a certificate of mailing and keep

the proof of mailing for your records.

You might want to write a few lines here explaining your

situation. For example, you may want to explain the circumstances that led to your falling behind on your bills. You might want to state that you want to pay the bills you owe, but cannot afford to pay them at this time. You might want to explain that your income is exempt from collection, if that is the case. You are not required to give any reason why you cannot or will not pay the alleged debt, but it could be to your benefit.

SAMPLE CEASE LETTER Use this letter to tell a debt collector to stop contacting you.

You can send this letter at any time. Sending this letter does not cancel your debt.

Send the original letter to the collection agency. You should

make at least one copy of the letter. Send one to the company to which you originally owed the money. Keep the second copy of the letter for yourself, along with certified mail receipts. You may also want to send a copy to these agencies: FTC—Consumer Response Center 600 Pennsylvania Ave, NW Washington, DC 20580 NYC Department of Consumer Affairs 42 Broadway New York, NY 10004

Fill in the name of the company the collection agency says you owe

money, and the account number. If you do not know this information, give the collection agency some other information so that it knows what debt you are talking about.

Consumer Law Project — ©2006 NEDAP New York City Financial Justice Hotline: (212) 925-4929

http://nedap.org/resources/consumer.html

Page 2 is an electronic form of this cease letter, which you may fill out

and print. Please complete the letter according to the above instructions.

Updated July 2008

CERTIFICATE OF MAILING Re: Dear Sir/Madam: Please verify the above-referenced debt as required by the Fair Debt Collection Practices Act. Aside from verification of the debt, do not contact me about this debt. The Fair Debt Collection Practices Act, 15 USC Section 1692c requires that you honor this request. Your cooperation will be appreciated. Sincerely, cc: Federal Trade Commission – Consumer Response Center New York City Department of Consumer Affairs

CREDITOR* SENDSRESTRAINING NOTICE WITH FORMS

TO DEBTOR’S BANK

NYS Exempt Income Protection ActEffective Jan. 1, 2009Prepared by Gina Calabrese, Professor of ClinicalEducation, St. John’s University School of Lawand the Empire Justice Center. (revised July 2009)

Account contains reasonably identifiable exempt funds

direct deposited in last 45 days

$2 500 or less in account: More than $2 500 in account:

Account does not contain funds identifiable as exempt

$1 716 or less in account:More than $1 716 in account:

BANK SENDS FORMS TO

$2,500 or less in account:Restraint deemed void;

all funds remain available

More than $2,500 in account: $2,500 remains available;

balance is restrained

$1,716 or less in account: Restraint deemed void;

all funds remain available

More than $1,716 in account:$1,716 remains available;

balance is restrained

D bt l t fBANK SENDS FORMS TO DEBTOR WITHIN 2 DAYS

OF RECEIPT

Debtor completes forms and returns to bank and creditor within 20 days of

postmark

Debtor does not return forms

Creditor does nothing,

after 8 days….

Creditor must instruct bank to release account within 7 daysIF debtor provides proof that all funds are

t

Creditor objects (must be in good faith). Serves motion on bank and debtor within 8 days. Hearing within 7 days; decision within 5 days. C dit d b k

Excess funds remain restrainedand subject to marshal’s or

sheriff’s execution

If debtor’s information shows that funds are co-mingled (exempt and non-exempt),

dit liexempt.Creditor serves order on bank and debtor within 2 days.

If bank does not receive order to further restrain funds within 21 days of creditor’s objection

creditor applies lowest intermediate balance accounting principle, and must instruct

*Note: These provisions do not apply when the state of NY, its agencies or municipal corporations is the judgment creditor, or if the debt enforced is for child or spousal support,

i t li d th t i i

Bank releases account.

days of creditor s objection… must instruct bank to release resulting exempt funds within 7 days

maintenance or alimony and the restraining notice contains a legend at the top in 16-pt type, with language set forth in statute stating such.

This is a sample summons for a debt collection lawsuit in the Kings County (Brooklyn) Civil Court. If you received a summons, you can use this guide to help you understand it. Your summons might look different or be for a different court. However, it should contain similar information. If you have more questions about your summons, call the NYC Financial Justice Hotline, at 212-925-4929.

CONSUMER CREDIT TRANSACTION IMPORTANT!! YOU ARE BEING SUED!! THIS IS A COURT PAPER – A SUMMONS

DON’T THROW IT AWAY!! TALK TO A LAWYER RIGHT AWAY! PART OF YOUR PAY CAN BE TAKEN FROM YOU (GARNISHEED). IF YOU DO NOT BRING THIS TO COURT, OR SEE A LAWYER, YOUR PROPERTY CAN BE TAKEN AND YOUR CREDIT RATING CAN BE HURT!! YOU MAY HAVE TO PAY OTHER COSTS TOO!!! IF YOU CAN’T PAY FOR YOUR OWN LAWYER BRING THESE PAPERS TO THIS COURT RIGHT AWAY, THE CLERK (PERSONAL APPEARANCE) WILL HELP YOU! Civil Court of the City of New York Summons

County of KINGS

HOW TO READ A CIVIL COURT SUMMONS

DEBT COLLECTION AGENCY

Plaintiff against JANE CONSUMER Defendant(s)

Index No. 12345 Plaintiff’s Address: 123 MAIN ST., STE 500 CITY, ST 99999 FILE NO. 1234567890 The basis of venue designated is: Defendant resides in KINGS County Transaction took place in KINGS County

To the above named Defendant(s) YOU ARE HEREBY SUMMONED to appear in The Civil Court of the City of New York, County of KINGS at the office of the Court Clerk at 141 LIVINGSTON STREET, BKLYN in the County of KINGS City and State of New York, within the time provided by the law as noted below and to file your answer to the annexed complaint with

the Clerk: upon your failure to answer, judgment will be taken against you for the sum of $ 4000.00 with interest thereon from the 20 day of JANUARY, 2005 together with the costs of this action. Date: 7/1/05 DEBT COLLECTION LAW FIRM ATTYS FOR PLAINTIFF 111 MAIN STREET NEW YORK NY 10001

Def: 1111 BROOKLYN AVE, BROOKLYN NY 11200 TEL: 212-123-4567 Note: The law provides that (a) If this summons is served by its delivery to you personally within the City of New York, you must appear and answer within 20 days after such service or (b) If this summons is served by delivery to any person other than you personally or is served outside the City of New York you are allowed 30 days after proof of service thereof is filed with the Clerk of this Court within which to appear and answer.

This statement is required by the rules of the New York City Civil Court and should appear at the top of your summons.

This is the name of the creditor that is suing you. It is important to answer the summons even if you have never heard of the creditor. If you answer the summons, the creditor will have to prove to the judge that you actually owe the debt. If there has been a mistake, the court hearing will provide a good opportunity to clear it up. If you do not answer the sum-mons, the court will issue a judgment against you (a “default judgment”). The creditor will then have a right to try to collect money from you.

The Index Number identifies your file at the courthouse. If you need copies of documents filed in your case, give the clerk this number, and he or she will let you copy the court file.

This section gives you important information. It states that you have been sued, and it tells you that you must respond to the lawsuit by going to the clerk’s office and filing an “answer.” It also tells you the address of the courthouse (here, 141 Livingston Street in Brooklyn) and the amount of money for which you are being sued (here, $4,000).

This section explains the time limits for responding to the summons. If you were served with the summons in person, you have 20 days from the date you were served. If you received the summons in another way, you have 30 days. You should respond even though there is no specific court date. To respond, go to the clerk’s office at the address provided on the summons and tell the clerk you want to file an “answer in person.” The clerk will help you prepare an answer and give you a date to appear before the judge.

Here you will find contact information for the law firm representing the creditor. You should respond to the summons even if someone from the creditor’s law firm tells you not to worry about it. If you do not respond by filing an answer and appearing at your court date, the court will enter a default judgment against you.

New York City Consumer Financial Justice Project Hotline: (212) 925-4929

http://nedap.org/resources/consumer.html

Your Name

Your Street Address

City, State ZIP Code

Date___________________

CERTIFICATE OF MAILING

Collection Agency’s Name

Collection Agency’s Address

City, State ZIP Code

Re: Name of company to which you owe money; Account Number

Dear Sir/Madam:

I am disputing the above-referenced debt. Please verify this debt as required by

the Fair Debt Collection Practices Act (FDCPA) (section 1692g) and New York

City Administrative Code (section 20-493.2). New York City regulations

require all debt collectors to send specific written documentation verifying

the debt. Under section 2-190 of the Rules of the City of New York, verifica-

tion requires all of the following:

Proof of my agreement to pay the original creditor;

A copy of the final account statement issued by the original creditor;

A breakdown of the total amount due, showing principal, interest, and

other charges; and

For all other charges, the date of and basis for each charge.

I dispute this debt because

Because I am disputing this debt, you should not report it to the credit reporting

agencies. If you have already reported it, please notify the credit reporting agen-

cies that the debt is disputed and/or delete the tradeline from my credit report.

Reporting information that you know to be inaccurate, or failing to report infor-

mation correctly, violates the FDCPA and the Fair Credit Reporting Act.

Aside from verifying the debt, do not contact me about this debt. The FDCPA

and Rules of the City of New York (section 5-77) require that you honor this

request. Thank you.

Sincerely,

_____________________

(Your name and signature)

cc: (Insert Name of Company) Federal Trade Commission – Consumer Response Center

New York City Department of Consumer Affairs

Make sure to mail your letter with

a certificate of mailing and keep the proof of mailing for your records.

Explain why you are disputing the

debt. Here are a few reasons why you would dispute a debt:

(1) You do not owe the debt;

(2) You do not recognize the debt;

(3) You are a victim of identity theft; (4) The debt has been paid;

(5) You never received the item or service for which you were charged;

(6) The debt is past the statute of limitations (too old).

SAMPLE DEBT COLLECTION DISPUTE LETTER (NYC)

New York City residents can use this letter to dispute a debt, to verify a debt under NYC law, and to tell a collector to stop contacting them.

Send the original letter to the

collection agency. You should make at least one copy of the letter to

keep for your records, along with your proof of mailing. You may also want to

send copies to the original creditor and

these agencies:

FTC—Consumer Response Center 600 Pennsylvania Ave, NW

Washington, DC 20580

NYC Department of Consumer Affairs 42 Broadway

New York, NY 10004

Fill in the name of the company to

which the collection agency says you owe money, and the account

number. If you do not know this information, give the collection agency

some other information so that it knows

what debt you are talking about.

©2006 by the Neighborhood Economic Development Advocacy Project, Inc. | All Rights Reserved www.nedap.org | info@nedap.org | 212-680-5100

Page 2 is an electronic form of this

dispute letter, which you may fill out and print. Please complete the letter

according to the above instructions.

You may want to attach copies of

documents that support your dispute, such as proof of payment or a

police report.

Updated March 2011

CERTIFICATE OF MAILING

Re:

Dear Sir/Madam:

I am disputing the above-referenced debt. Please verify this debt as required by the Fair

Debt Collection Practices Act (FDCPA) (section 1692g) and New York City Administrative

Code (section 20-493.2). New York City regulations require all debt collectors to send

specific written documentation verifying the debt. Under section 2-190 of the Rules of

the City of New York, verification requires all of the following:

Proof of my agreement to pay the original creditor;

A copy of the final account statement issued by the original creditor;

A breakdown of the total amount due, showing principal, interest, and other

charges; and

For all other charges, the date of and basis for each charge.

I dispute this debt because

Because I am disputing this debt, you should not report it to the credit reporting

agencies. If you have already reported it, please notify the credit reporting agencies

that the debt is disputed and/or delete the tradeline from my credit report. Reporting

information that you know to be inaccurate, or failing to report information correctly,

violates the FDCPA and the Fair Credit Reporting Act.

Aside from verifying the debt, do not contact me about this debt. The FDCPA and Rules

of the City of New York (section 5-77) require that you honor this request. Thank you.

Sincerely,

cc: Federal Trade Commission – Consumer Response Center

New York City Department of Consumer Affairs

Civil Court of the City of New YorkCounty of ______________________ Index Number _____________________________________________________

WRITTEN ANSWER

Plaintiff(s), CONSUMER CREDIT TRANSACTION

-against- Defendant(s), __________________________________________

Defendant ________________________________ answers the Complaint as follows:

ANSWER: (Check all that apply)1.____ General Denial: I deny the allegations in the Complaint.

SERVICE 2.____ I did not receive a copy of the Summons and Complaint.3.____ I received the Summons and Complaint, but service was not correct as required by law.

DEFENSES4.____ I do not owe this debt.5.____ I did not incur this debt. I am a victim of identity theft or mistaken identity.6.____ I have paid all or part of the alleged debt.7.____ I dispute the amount of the debt.8.____ I do not have a business relationship with Plaintiff (Plaintiff lacks standing).9.____ The NYC Department of Consumer Affairs shows no record of plaintiff having a license to collect debt.10.___ Plaintiff does not allege a debt collector’s license number in the Complaint.11.___ Statute of limitations (the time has passed to sue on this debt).12.___ This debt has been discharged in bankruptcy.13.___ The collateral (property) was not sold at a commercially reasonable price.14.___ Unjust enrichment (the amount demanded is excessive compared with the original debt).15.___ Violation of the duty of good faith and fair dealing.16.___ Unconscionability (the contract is unfair).17.___ Laches (plaintiff has excessively delayed in bringing this lawsuit to my disadvantage). 18.___ Defendant is in the military.19.___ Other ________________________________________________________________________

OTHER20.___ Please take notice that my only source of income is _______________________, which is exempt from collection.

COUNTERCLAIM(S)21.___ Counterclaim(s): $___________________ Reason:__________________________________________

VERIFICATIONState of New York, County of ___________________ss:

_____________________________, being duly sworn, deposes and says: I have read the Answer in Writing and know the contents tobe true from my own knowledge, except as to those matters stated on information and belief, and as to those matters I believe them tobe true.

Sworn to before me this ____ day of ________, 20____.

Signature of Defendant Notary/Court Employee

____________________________________________ Defendant’s address

This case is scheduled to appear on the calendar as follows:

Date: Part: Room: Time: Both sides notified FREE CIVIL COURT FORM No fee may be charged to fill in this form.CIV-GP- 58b Written Answer Consumer Credit(12/08) Form can be found at: http://www.nycourts.gov/courts/nyc/smallclaims/forms.shtml.