§ 20-494.1 Prohibited and required practices relating to the collection of child support payments.
AC § 20-494.1
a. For purposes of this section the following terms shall have the following meanings: 1. "Current payment of child support" shall mean a payment made pursuant to a schedule arising out of a judgment or valid agreement for the payment of child support which is made within thirty days of such payment's due date.
2."Potential client" shall mean a person seeking child support debt collection services from a debt collection agency. b. Any agreement or contract for the collection of child support payments shall be in writing and shall not extend beyond twelve consecutive months. Renewal of such contracts shall not be automatic and shall require the consent in writing of all parties to the contract. c. No debt collection agency that collects child support payments shall: 1. charge interest or otherwise impose a charge or fee for its services that exceeds fifteen percent of each child support payment collected.
3.charge interest or otherwise impose a charge or fee for a current payment of child support.
4.impose a charge or fee for the costs of an application.
5.impose a charge or fee for legal services unless paid to an independent firm, practitioner or agency for actual costs incurred and unless agreed upon in writing by the potential client.
6.impose a charge or fee for the termination of a contract for the collection of child support.
7.impose a charge or fee that does not bear a reasonable relationship to the amount of child support actually collected.
8.designate a current payment of child support as arrears.
9.prohibit the termination of a contract for the collection of child support payments until arrears are paid.
10.include any terms in a contract for the collection of child support that conflict or are inconsistent with the terms set out in this subchapter. d. an agreement for the collection of child support shall terminate automatically if no payment of child support has been collected by such debt collection agency for a period of six consecutive months. e. Any debt collection agency that collects child support payments shall provide to a potential client a written disclosure form at the same time as such agency first furnishes such potential client with any informational or promotional materials, application or contract for services, regardless of the manner in which such materials are provided including, but not limited to, in-person contact, fax, regular mail, internet or other electronic means, containing, but not limited to, the following information prominently disclosed in a meaningful sequence: 1. No obligation. A potential client shall be advised that such client is under no obligation to hire a debt collection agency to collect child support payments on behalf of such client and that: (i) New York city's office of child support enforcement (OCSE) provides child support enforcement services at no cost to families regardless of income and (ii) OCSE's powers include, but are not limited to, garnishments against wages, liens on bank accounts and property, tax refund intercepts and the initiation of incarceration proceedings.
(i)Application fees. A potential client shall be advised that child support debt collection agencies are prohibited by law from charging a fee for the costs of an application.
(ii)Prohibition against collection fees for child support payments that are not in arrears. A potential client shall be advised that debt collection agencies are prohibited by law from collecting fees for child support payments that are not in arrears and that it is unlawful for such an agency to designate a current payment of child support as arrears.
(iii)Legal fees. A potential client shall be advised that child support debt collection agencies are prohibited by law from charging for legal services unless such fees are paid to an independent firm, practitioner or agency for actual costs incurred and unless agreed upon in writing by the potential client.
(iv)Early termination penalty. A potential client shall be advised that child support debt collection agencies are prohibited from imposing a charge or fee for the termination of a contract.
(v)Additional fees. A potential client shall be advised regarding any additional fees or potential additional fees, including but not limited to, the services for which such fees may be imposed, how such fees are calculated and when such fees are billed. A potential client shall also be advised that any fees must bear a reasonable relationship to the amount of child support actually collected.
(vi)A potential client shall be advised that child support debt collection agencies are prohibited by law from imposing any contract terms that conflict or are inconsistent with the provisions specified in the required disclosure form required under section 20-494.1(e).
