1. (a) Charge-off means the accounting action taken by an original creditor to remove a debt obligation from its financial statements by treating it as a loss or expense.
2. (b) Clear and conspicuous means that the statement, representation or term being disclosed is of such size, color, and contrast and/or audibility and is so presented as to be readily noticed and understood by the person to whom it is being disclosed. If such statement is necessary as a modification, explanation or clarification to other information with which it is presented, it must be presented in close proximity to the information it modifies, in a manner so as to be readily noticed and understood.
3. (c) Consumer means any natural person who owes or who is alleged to owe a debt.
4. (d) Debt means any obligation or alleged obligation of a consumer for the payment of money or its equivalent which arises out of a transaction wherein credit has been extended to a consumer, and the money, property or service which was the subject of the transaction was primarily for personal, family or household purposes. This term includes the obligation of a consumer who is a co-maker, guarantor, or endorser, as well as the obligation of the consumer to whom the credit was originally extended. Debt shall not include any obligation or alleged obligation of a consumer for the payment of money or its equivalent which arises out of a transaction wherein credit has been provided by a seller of goods or services directly to a consumer exclusively for the purpose of enabling that consumer to purchase such consumer goods or services directly from the seller.

5. (e) Debt collector means any person engaged in a business the principal purpose of which is the collection of any debts, or any person who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Debt collector includes without limitation a buyer of debts who seeks to collect such debts either directly or indirectly. The term does not include:

   1. (1) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;
   2. (2) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;
   3. (3) any officer or employee of the United States or any state to the extent that collecting or attempting to collect any debt is in the performance of his or her official duties;
   4. (4) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;
   5. (5) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors;

   6. (6) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity:

      1. (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement;
      2. (ii) concerns a debt which was originated by such person;
      3. (iii) concerns a debt which was not in default at the time it was obtained by such person; or
      4. (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor; and

   7. (7) any person with respect to:

      1. (i) serving, filing, or conveying formal legal pleadings, discovery requests, judgments or other documents pursuant to the applicable rules of civil procedure;
      2. (ii) communicating in, or at the direction of, a court of law or in depositions or settlement conferences or other communications in connection with a pending legal action to collect a debt on behalf of a client; or
      3. (iii) collecting on or enforcing a money judgment.
6. (f) Original creditor means any person or such person’s successor in interest by way of merger, acquisition, or otherwise, who extends credit creating a debt.
7. (g) Person has the same meaning as prescribed in Financial Services Law section 104(a)(3).

For the purposes of this Part: