Debt buyers may not give the date of the incurred debt, the original creditor’s name, or even how much the original debt was for, leading to a great deal of confusion and anxiety for consumers.
Queens, NY (PRWEB) February 25, 2015
New York will soon have some of the strongest debt collection laws in the country thanks to new regulations released by the New York Department of Financial Services. Bruce Feinstein, Esq., attorney for bankruptcy in Queens, is sharing these new rules that aim to protect New Yorkers in debt who are suffering from abusive debt collectors and their practices. The majority of the regulations are set to go into effect on March 3, 2015, with the remainder starting in August 2015.
Debt collection has long been a problem for New Yorkers who are suffering from debt problems. According to a December 3, 2014 press release from the offices of New York Governor Andrew Cuomo, “In 2014 alone, New York consumers have filed more than 20,000 complaints regarding debt collection practices.”
Complaints that were filed describe aggressive collection methods, harassing behavior, and attempts to collect the wrong amounts of money. The majority were filed against debt buyers, which are companies that purchase old debts from other parties at a steep discount and then attempt to collect them. These companies do little to confirm that the purchased debts are even still owed, and end up attempting to collect debts that have already been paid or are too old. And these agencies may give little information about the actual debt to the supposed debtor. “Debt buyers may not give the date of the incurred debt, the original creditor’s name, or even how much the original debt was for, leading to a great deal of confusion and anxiety for consumers,” says Mr. Feinstein.
These unfair collection tactics and complaints caught the attention of the New York Department of Financial Services, which then filed new debt collection regulations to curb this abusive behavior. One new rule is required disclosures; a debt collector or buyer must inform consumers about their rights and legal actions the collector can take to collect the debt. They must also provide information about the debt itself, such as the name of the original creditor who took on the debt, and an itemized description of the debt. Mr. Feinstein adds, “Most importantly, if the collector knows that the statute of limitations has expired on the debt, it needs to tell this to the consumer. It cannot withhold information.”
Another important new rule covers “substantiation.” If the consumer disputes the debt, the collector has to explain how the consumer can request substantiation, which provides information about the debt, any changes in title from the original creditor, and payment or settlement history on the debt. “This rule helps give essential information to the consumer, so he or she knows exactly what happened to the debt,” says Mr. Feinstein. “The collector also needs to stop attempting to collect the debt until substantiation is provided, much like an automatic stay protects people who file for bankruptcy in New York.”
The regulations also set forth rules for creating a paper trail if the collector and the consumer set up a payment schedule to repay the debt. Written confirmation must be made about the agreement, and again once the debt has been repaid. The debt collector can also communicate with the consumer through email if the consumer consents to this correspondence. “This can help people in debt who are getting harassing phone calls from debt collectors because it gives them an alternate mode of communication,” says Mr. Feinstein.
For New Yorkers dealing with debt collectors, these rules will hopefully provide some much needed relief and clarification. Mr. Feinstein adds, “These new regulations may force debt buyers to keep better records and get more information about the debts they are buying, rather than buying them in bulk.”
Detailed information about the new rules is available on the New York Department of Financial Services website. Whether New Yorkers in debt are considering filing for bankruptcy or attempting to just get more information about their debt, these rules should help ease the confusion and anxiety.
The Law Offices of Bruce Feinstein has nearly two decades of experience in bankruptcy law, helping clients and families resolve their issues and move forward with their lives. Visit feinsteinbankruptcylaw,com for more information or call (718) 514-9770 to reach the New York office.