Has your credit card, personal loan or other debt been sold from the original creditor to a new debt buyer?
Up to now, New York consumers have been faced with confusion when it came to deciphering the names of companies who bought their debts. Companies like Erin Capital Management, LR Credit and others would mysteriously appear on bills and in lawsuits brought against consumers.
Now, in a dramatic legislative change, those entities will be required to register with the New York City Department of Consumer Affairs even if all they do is buy bad debts and hire bill collectors and lawyers to sue consumers.
The newly passed rules, which will be signed on March 18, 2009, change the way debt buyers are regulated as they deal with accounts from the city’s 8 million residents.
Under old rules, debt buyers were not forced to register unless they actively engaged in debt collection activity. The new rules apply to companies that purchase accounts, even if they outsource collections to third parties.
In addition to bringing debt buyers into the collection agency regulatory universe, the bill lays out specific information that must be shared with consumers. Agencies will now be required to identify the original creditor, itemize the money owed, provide background information on the obligation and give confirmation in writing when the debt is settled.
Source: InsideARM.com.
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