Financial regulators in New York State have recently proposed sweeping new reforms concerning debt collection practices. There have been more than 13,000 complaints filed against debt collection agencies in the State of New York within the past two years. Debt collection companies sometimes buy defaulted debts for a few cents on the dollar and proceed to collect them with very aggressive tactics. The complaints against debt collection companies range from harassing phone calls, providing information concerning the debts to third parties and trying to collect more than is due and owing.
There is a Federal Statute called the Fair Debt Collection Practices Act. This law regulates the hours debt collectors can make phone calls, prevents them from making threats, using obscenities and making numerous phone calls for the purpose of harassing the debtor.
The New Regulations
The new regulations in New York would require debt collectors to verify all disputed debts. In addition, the debt collectors would have to advise consumers when the statute of limitations concerning their debt has expired. The debt collector would have to advise the consumer if a payment on a debt is made after the statute of limitations has expired that this would restart the statute of limitations running all over again. The new regulations would require debt collectors to provide debtors a “clear and conspicuous written document” confirming payment schedules on debts.
These regulations will go into effect upon publication in the State Register. Publication would take place after there has been a 45 day period of time for the general public to make suggestions and comments concerning these regulations. The purpose of these new regulations according to Ben Lawsky, the Superintendent of the Department of Financial Services for New York State, was “to level the playing field for consumers.”
Elliot S. Schlissel, Esq. is an attorney practicing law in the metropolitan New York area. Elliot and his associates represent clients in bankruptcy matters. In addition, the firm has extensive experience in defending foreclosure lawsuits.