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New York Consumer Rights Abused by Debt Collectors

Shady debt collection practices are nothing especially new.

But the kinds of tactics being carried out by some of the country’s largest lenders are garnering extra scrutiny from federal regulators with dwindling patience in the wake of widespread abuses carried out by these entities at the height of the foreclosure crisis.
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Now, there is evidence of widespread consumer rights violations in New York and elsewhere. Some of these practices have long been perpetuated and simply overlooked by federal regulators. But newer allegations are beginning to surface as well.

Primarily, it involves large lenders and retailers and their contracted debt collection arms hounding consumers for unpaid debts. In and of itself, this can be a problem, as these kinds of actions are strictly regulated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is enforced by the Federal Trade Commission, the Consumer Financial Protection Bureau and, in some cases, the Office of the Comptroller of the Currency.

Companies can’t simply call you anytime or any place. They are forbidden from calling before 8 in the morning or after 9 in the evening, unless you’ve expressly agreed to it. They can’t contact you at work if they are informed either orally or in writing that you are not allowed to accept such calls there. A debt collector should be referring all calls to your lawyer’s office, if you are represented by an attorney. But otherwise, they can’t contact anyone other than you, except to find out your home phone number and where you work. In most cases, collectors are only allowed to contact those individuals one time. Even then, they are not permitted to discuss your debt with anyone but you, your spouse and your attorney.

Collectors are also forbidden from threatening violence or harm, publishing the names of those who can’t or won’t pay their debts, using profane language, repeatedly using the phone to annoy someone, making false claims about who they represent or about the legality of the forms they are sending, and they can’t tell you you’ll be arrested for your debt or that you’ll have your wages garnished if they don’t have the authority to do so.

Of course, that hasn’t stopped some companies from engaging in these tactics.

And what’s more, harkening back to the robo-signing foreclosure scandal, some large financial institutions have been filing mountains of paperwork without having any verification of the debts or debt amounts.

The FTC recently secured a $3.2 million penalty against Expert Global Solutions, which is the world’s largest debt collection agency, amid accusations that the firm routinely harassed consumers.

Additionally, The New York Times reported, the OCC is investigating how certain banks, such as JPMorgan Chase, carry out their credit card debt collection practices. Errors were reportedly discovered in about 10 percent of all monetary judgments secured by the bank against consumers in collections lawsuits from 2009 through 2011. Those errors had consumers paying more than what they actually owed because the debt amounts weren’t properly vetted prior to trial.

Consumers on the whole acknowledge that they do owe some money here and there, though research shows fewer customers are falling behind on their payments as the economy continues to improve. However, the biggest problems arise when creditors and third-party debt collectors violate the laws that govern how they can go about trying to get paid.

If you are battling abusive debt collection practices, call our offices today.

The Law Offices of Ira S. Newman provides consumer rights litigation representation in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or send us an e-mail.

Additional Resources:
U.S. Vows to Battle Abusive Debt Collectors, July 10, 2013, By JESSICA SILVER-GREENBERG and EDWARD WYATT, The New York Times
More Blog Entries:
New York Home Improvement Compliance Guide for Contractors, Salespersons and Consumers, July 12, 2013, New York Consumer Rights Lawyer Blog