Last December, Governor Cuomo revealed the eighth proposal of the 2020 State of the State agenda. The proposal would require debt collectors that contact New York citizens to be licensed by the State Department of Financial Services. The goal of this proposal is to protect New York consumers from abusive and deceptive debt collectors. If creditors have to become licensed, it will guard consumers against creditor harassment.
How Exactly Will this Proposal Help Consumers?
For the past four years, abusive, harassing, and deceptive creditors have been the most frequent complaint to the FTC. Licensing debt collectors who operate in New York will require them to adhere to strict standards and regulations. The state would start examining debt collectors and withdraw the license of collectors who fail to uphold the new standards of conduct.
The proposal will also establish a new Federal Trade Commission rule that prohibits confessions of judgment. Currently, creditors have the power to take lenders to court if they claim that the borrower missed a payment. They can also get a judgment from a clerk and take the amount owed from the borrower’s bank account. With this new rule, creditors would no longer be able to do that.
According to Governor Cuomo, "New York is a national leader when it comes to taking on predatory debt collectors, but current law has allowed many bad actors to go unchecked."
Abusive Debt Collectors Nationwide
In 2018, federal authorities received nearly a half-million customer complaints about debt collectors. Debt collection firms have shut down and have been ordered to pay millions in penalties due to deceptive practices, which include harassment and threats. As a national issue, Governor Cuomo’s proposal is meant to regulate creditors to put an end to predatory practices from debt creditors.
If you are struggling to pay back your consumer or commercial debts, get in touch with our New York debt defense attorney today at (516) 217-4488 to schedule a free 30-minute initial consultation!