In a recent legal battle that could reshape debt collection practices in New York City, ACA International and Independent Recovery Resources, Inc. have filed a lawsuit against the city’s mayor, Eric Adams, and other municipal entities. The complaint was lodged on October 18, 2024, in the United States District Court for the Eastern District of New York. The plaintiffs are challenging a new rule amending Title 6 of the Rules of the City of New York, which they argue infringes upon constitutional rights and is preempted by federal and state laws.
The plaintiffs in this case are ACA International, a Minnesota nonprofit representing credit and collection professionals, and Independent Recovery Resources (IRR), a small debt collection agency based in Patchogue, New York. They allege that the new rule violates several constitutional amendments by imposing undue restrictions on speech related to debt collection. Specifically, they claim it discriminates based on content and speaker identity in violation of the First Amendment. Furthermore, they argue that it mandates unnecessary speech to the detriment of both collectors and consumers and promulgates vague rules that contravene due process under the Fourteenth Amendment.
ACA International asserts that its members' activities will be severely restricted by this rule, which limits communication attempts with consumers to three times per week across all mediums. This restriction is said to hinder their ability to resolve debts amicably outside of court proceedings. Additionally, IRR contends that compliance with these new regulations would require significant financial investment and operational changes beyond their current capabilities as a small business.
The plaintiffs seek declaratory and injunctive relief from the court to prevent the enforcement of this rule set to take effect on December 1, 2024. They argue that without intervention, their operations will suffer irreparable harm due to increased costs and logistical challenges associated with compliance. Moreover, they highlight potential negative impacts on consumers who may face increased litigation if voluntary debt resolution becomes more difficult under these constraints.
Case I.D.: 24-cv-7342