Could Stronger State Debt Collection Laws be Coming to New York State?
- June 13, 2014
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By: Robert J. Nahoum
On May 28, 2014, the New York State Assembly passed a series of bills aimed at debt collectors. Included in the proposed laws is an enlargement of disclosure requirements to consumers, stronger court filings requirements and in debt collection lawsuits and a mandatory statewide licensure for debt collectors.
The Assembly is committed to doing whatever we can to ensure that if a person is doing their part to get out of debt and get their finances in order, they will be protected from debt collector abuse, treated fairly and have the necessary information and resources readily available and easy to understand,
said Assembly Speaker Sheldon Silver.
Under the proposed laws, in their initial debt collection communications, debt collectors would be required to disclose consumers rights provided under New York State law as well as the federal Fair Debt Collection Practices Act (FDCPA), a law intended to eliminate misleading, harassing and abusive debt collection tactics.
The new laws would also create the “Consumer Credit Fairness Act” (CCFA). The CCFA reforms procedural rules in debt collection lawsuits and, among other things, (1) requires that creditors submit affidavits detailing proof in support of default judgment motions, (2) establishes a uniform three-year statute of limitations for consumer debt collection cases to stop debt collectors from suing on time barred debts, and (3) establishes rules to prevent “sewer service”.
Another important bill would establish a New York State version of the FDCPA that mirrors the federal law with its own private right of action. An aggrieved consumer would have the power to sue debt collectors under for distinct and separate violations of both laws.
According to Judge Lippman, the Chief Judge of the State of New York,
dubious consumer debt litigation practices can lead to unwarranted default judgments, often with devastating consequences for the debtor ─ typically a lower-income New Yorker struggling to support a family and find or maintain a job. “These comprehensive reforms […]. will set a national standard by which consumer debtors receive fair treatment in the courts.
The bills that passed the Assembly have been referred to the New York Senate’s Committee on Consumer Protection for consideration. It is unclear as of yet whether the state Senate will pass these of similar bills but consumer advocates are hopeful.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.