New York to enact new debt collection rules to protect consumers
Being in debt is stressful. When you’re behind on bills and credit card payments, your debt sometimes get sold to third-party collectors, who begin calling you constantly. If you missed or did not get a notice that your debt was being sold, you may have no idea who is behind these harassing calls meant to collect money from you.
If you have significant and overdue credit card debt, you are not alone. In fact, over 100,000 credit card lawsuits a year get adjudicated in New York. Thankfully, New York’s top judge recently announced new rules that debt collectors must abide by when they seek payments in court.
Jonathan Lippman is Chief Judge of the New York Court of Appeals. Recently, Lippman discussed new rules meant to crack down on abuses and unethical business practices of third-party collectors who take cases to court.
Many people who get sued by third-party collectors are never informed about the legal action ahead of time. Lippman said these rules will put a stop to “sewer services,” which is a reference to throwing court papers (figuratively) down the sewer rather than serving them to the debtor.
And although third-party collectors are often aggressive about collecting debts, their lawsuits commonly contain incomplete and inaccurate information. Lippman announced that creditors will have to sign affidavits attesting that they have “firsthand knowledge of key facts,” according to a recent news article.
Third-party collections may never be a completely reputable part of the industry, but the practices of these debt collectors should at least be fair. Thanks to the efforts of Chief Judge Jonathan Lippman and others, fairness and transparency will likely be greatly improved.
Source: TimesUnion.com, “State’s top judge takes aim at debt collectors,” Rick Karlin, April 30, 2014