New York State Governor Andrew Cuomo has said he plans to take on debt collectors
SHANGHAI & BEIJING - New York State Governor Andrew Cuomo has said he plans to take on predatory and abusive debt collectors.
By Andy B. Mayfair
His proposal would require the thousands of debt collectors that contact New Yorkers every day to be licensed by the state Department of Financial Services.
“Licensing debt collectors operating in New York would ensure that debt collectors adhere to stringent standards of conduct and empower the State to examine debt collectors and pull the license of bad actors,” Cuomo told reported on Thursday. “We license barbers, home inspectors and used car dealers in New York — so it makes no sense that we don’t have the authority to license an industry that can cause families financial ruin. As this industry grows and increasingly deploys abusive and deceptive practices to prey on consumers, this proposal would give the state new tools to regulate debt collectors — stopping unscrupulous practices and strengthening our consumer protection laws.”
Abusive lenders “would be subject to investigation, even penalties and even the loss of operating licenses should DFS see fit,” reported The New York Post. “The debt collection industry brought in roughly $11 billion in 2019. Thirty-two percent of Americans owe to collectors, with 25 percent of those individuals being from New York.”
“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,” Cuomo said in a release.
Specifically, Cuomo would require debt collectors to obtain licenses from the Department of Financial Services. The proposal would give the state the authority to investigate collectors and stop them from working if they are found to harass or deceive New Yorkers.
The state’s Department of Financial Services has long counseled consumers on ways to handle debt collection. As it notes on its web site, “Many people struggle with what to do when contacted by a debt collector, especially when the collector is calling from a company they have never heard of. Under state and federal laws, you are protected from abusive, deceptive, and unfair debt collection practices.”
One strategy is to request additional information from a debt collector. “If you are contacted by a debt collector that you don’t recognize or about a debt you don’t recall, you may want to request additional information from the collector. Under federal law, if you request information on a debt collector within 30 days of the first contact, the debt collector must provide you verification of the debt, including information about the original creditor.”
Under New York debt collection regulations, New Yorkers have the right to request additional information on most “charged-off” debts, which are defaulted debts that a creditor removed from its books, and then, typically, sold to another entity to collect. “For example, this could be a defaulted credit card debt that was sold by your credit card company to another company to collect.”
In another New York State crackdown, the NY Post reported on Friday that Cuomo is planning to propose a measure that deter retailers who sell cigarettes that are untaxed and which originate from out-of-state. This measure could ban businesses from selling tobacco.
“Cigarettes claim thousands of lives each year, and we will not turn a blind eye to retailers who deliberately flout the law just to make an extra buck at the expense of the health of New Yorkers,” Cuomo said.
New York currently has the second-highest tax rate on cigarettes in the nation at $4.35 per package of 20 cigarettes.
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