New York City Finalizes SHIELD Rule Imposing New Requirements On Debt Collection Practices

The New York City Department of Consumer and Worker Protection (“DCWP”) has finalized the Stopping Harassment and Intimidation and Ensuring Lawful Debt Collection Rule (the “SHIELD Rule”), introducing significant new compliance obligations for debt collectors and original creditors operating within New York City. The rule was published on February 26, 2026 and takes effect September 1, 2026.

The SHIELD Rule is designed to curb inaccuracies in consumer debt collection, address medical billing failures, and limit conduct the city views as harassing or abusive. It also arrives amid reduced federal enforcement activity and a marked increase in consumer complaints related to debt collection.

Key Provisions

1. Expanded Consumer Dispute Rights

• Consumers may dispute a debt at any point during collection.
• Debt collectors have 60 days to verify a disputed debt.
• If not verified, the debt may not be pursued by the third-party debt collector and must be returned to the creditor.

1. Communication Restrictions

• Collectors may contact consumers no more than three times per week across phone calls, texts, and emails.
• Written mail communications are not subject to numerical limits.
• The city plans to enforce these limits closely.

1. Medical Debt Protections

• Medical debts become uncollectible if hospitals fail to:
  • Disclose financial assistance availability;
  • Provide clear explanations of charges; or
  • Inform patients of dispute rights.
• The rule aims to reduce “zombie debt” and address pervasive medical billing errors.

1. Coverage of Original Creditors

• The rule applies to original creditors, including hospitals, when they engage in debt collection activities.
• Pre‑collection billing communications remain outside the rule’s scope.

An earlier version of the rule was challenged by industry groups in 2024 on First Amendment grounds. The lawsuit was later dropped after the city revised its approach. The finalized rule also follows a significant rise in federal consumer debt‑related complaints and the rollback of several federal medical debt reporting and collection initiatives.

Recommended Next Steps

While the primary target of the SHIELD Rule is medical billing, the SHIELD Rule applies equally to all debt collectors. Entities collecting debt in New York City should begin preparing for the September 1 effective date by:

• Updating communication policies to comply with weekly contact limits.
• Revising verification and dispute processes to meet new timelines and documentation standards.
• Evaluating medical billing and disclosure practices, including financial assistance notices.
• Training internal teams and third‑party vendors on new requirements.
• Conducting compliance reviews for any debt collection activity involving NYC residents.