20 Jul New York Debt Collectors May Have Tougher Time Collecting Debts
The State of New York is currently debating tougher debt collection guidelines. Well, it’s about time. If passed, debt collectors would be facing stricter scrutiny in their industry. The legislation, if passed, would be called the Consumer Credit Fairness Act. In the law, consumer debtors are provided with better protections than they ever were before from abusive practices of the debt collectors. Likewise, one of the purposes of the legislation is to plug current gaps in the state’s civil procedure laws to provide consumers an opportunity to protect themselves. Obviously, the debt collectors and debt collection lawfirms are opposed to any such changes to the current state of consumer litigation. Imagine that?????
The abuses that New York seeks to curb are debt collector harassment, intimidation and threatening phone calls with no intention of following through on the threat. One of the most widely abused threats is when the debt collector tells someone that they are sending over the police right now with an arrest warrant. This threat is usually not true. A person can only be arrested for a debt when they have done something criminal in nature, and they usually know what that is.
The bill would require debt collectors to also provide consumers with a Bill of Rights. The Bill of Rights would explain to consumers their rights in a meaningful manner without the consumer having to seek out an attorney right away. This concept is extremely important in my opinion because I see many people who feel that because they owe a debt they have no defenses. Likewise, many consumers have never been in this situation before, and they often feel embarrassed about their situation, so they don’t investigate their options right away.
Many consumers do not understand the litigation process, and quite frankly, do not know why they are being sued by a debt collector instead of the company that they owed money to.
Another positive note is that the legislation seeks to plug holes in New York’s current civil procedure system. For example, many consumers do not even receive the lawsuits. If this were to happen, a default judgment could be entered and the consumer may lose or waive valid defenses. Under this bill, only a Judge could review an application for a default judgment once a properly filed application came across his or her desk.
In New York, the incidents of debt collection abuses has been on the rise. This is an outstanding response to the current problems being faced by the consumers in New York. I wish many other states would respond with consumer legislation designed to level the playing field.
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