New York City Finalizes SHIELD Debt Collection Rule

On February 26, the New York City Department of Consumer and Worker Protection announced a final rule adopting the Stopping Harassment and Intimidation and Ensuring Lawful Debt (SHIELD) Collection Rule, which significantly expands the City's debt collection regulations beyond the federal Fair Debt Collection Practices Act and Regulation F. The rule limits communication with consumers, broadens dispute and verification rights, and establishes new protections governing the collection of medical debt. The rule will take effect September 1, 2026.

The SHIELD Rule introduces several significant changes to New York City's debt collection framework, including:

• Caps collector communication. Debt collectors may not make more than three communications or attempted communications to a consumer regarding a debt within a seven-day period, and collectors may not contact the consumer again during that period once the consumer has responded.
• Allows consumers to dispute debts at any time. Unlike the federal framework, consumers may dispute a debt or request verification at any point during the collection process and through any communication medium used by the collector.
• Requires verification within 60 days. After a consumer disputes a debt or requests verification, collectors must provide documentation substantiating the debt within 60 days. If verification is not provided within that period, third-party debt collectors lose the ability to collect the debt and must issue a Notice of Unverified Debt.
• Creates enhanced medical debt protections. Debt collectors are prohibited from furnishing information about medical debt to consumer reporting agencies and must treat certain consumer statements regarding insurance coverage, financial assistance eligibility, or billing errors as disputes requiring investigation and verification.
• Imposes expanded recordkeeping and operational requirements. The rule requires collectors to maintain detailed records regarding communications, disputes, complaints, and litigation activity, as well as recordings of certain consumer communications and policies related to time-barred debt and verification practices.

Putting It Into Practice: New York policymakers have increasingly taken the lead in expanding consumer protection requirements for financial services providers (previously discussed here). The SHIELD Rule is notable not only because it goes beyond the Fair Debt Collection Practices Act and Regulation F, but also because it extends certain obligations to original creditors, adds detailed verification and time-barred debt notice requirements, and establishes especially robust protections for medical debt. Debt collectors, debt buyers, financial institutions, hospitals, and other creditors collecting from New York City consumers should review communication policies, dispute intake procedures, verification workflows, and credit reporting practices before the rule's September 1, 2026 effective date.