New Rules Seek To Restrict Debt Collections
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by: Mallory Megan
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Word Count: 390
Date: Fri, 19 Mar 2010 Time: 11:21 AM
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Debt collectors could be dealing with stricter regulations on their ability to collect money if bills proposed by the governor and New York state Assembly ever get passed by the state Senate. Before the state Senate went into a terminal impasse, the state Assembly passed a series of laws aimed at cutting down on debt collector abuses that include threatening phone calls, harassment and intimidation. In addition, Gov. David Paterson has proposed similar measures to protect the public from abusive consumer debt collection practices.
The proposals would establish the Consumer Credit Fairness Act, which would reduce the current statute of limitations on personal debt from six to three years and would prohibit debt collectors from recovering debts that exceed the statute of limitations. It would also require debt collection firms to provide consumers with a written Debtors Bill of Rights that details the manner in which a debt collection company can recover debt and informs customers of frequent dishonest practices.
Debt collection company's would also be required to acquire a license of operation from the state of New York and would require firms to present a summary of the methods used to confirm the exactness of debts it seeks to recover, a clear record-keeping policy and whether it intends to sell debts. Don L. Hochler, an East Meadow attorney, said the projected statutes are a fair way to deal with abuses that have grown more common with the economic downturn.
According to the governors office, there were almost 3,900 complaints made to the state about debt collectors in the past four years. The consumer typically had no idea about any of the changes in debt holders and didnt know who it was that was trying to collect on the debt.
The proposals would obligate the collectors to adapt with the guidelines of the federal Fair Debt Collection Practices Act, which restricts calls to consumers to between 8 a.m. and 9 p.m. Kevin Schlosser, chairman of the litigation and dispute resolution law practice at Meyer, Suozzi, English & Klein in Garden City, said more people are paying attention to debt collection practices because of the economy.
Debt collectors first job is to communicate with consumers and answer consumer problems, Cherner said. Proposals that only restrict communication will only cause a rise in complaints.
About the Author
Mallory Megan works for a collections agency that works with a debt collection lawyer. She also composes pieces on business and finance, the credit industry and collections agencies.
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