Know Your Rights If You Are Contacted
The Department of Consumer Affairs (DCA) announced debt collectors were the agency’s top complaint for the fifth year in a row.
In 2012, the DCA received more than 650 complaints about debt collectors and was able to erase more than $1.12 million in wrongful debt collection. In the past five years, more than 4,000 New Yorkers have filed complaints about debt collectors, often about debts they don’t actually owe.
The DCA made the announcement at a press conference with the Federal Trade Commission, the Better Business Bureau and other Federal and State agencies and organizations in order to alert New York area consumers to the top consumer complaints of the past year and to educate them on how to avoid becoming victims of these and other scams in 2013.
“We are greatly concerned by the alarming new tactics we are seeing used by overly aggressive debt buyers and other debt collectors, such as using Caller ID spoofing to deceive people into thinking a courthouse or county clerk is calling,” said DCA Commissioner Jonathan Mintz. “We encourage New Yorkers experiencing erroneous, overly aggressive or fraudulent debt collection efforts to call 311 to file a complaint with us so our mediators and lawyers can help. And for those New Yorkers struggling with debt, please call 311 to make an appointment for free, one-on-one financial counseling at a nearby Financial Empowerment Center.”
Anyone collecting debts from New York City residents must be licensed by the DCA and must include their DCA license number in all letters sent to consumers no matter where the agency is located. The DCA currently licenses more than 1,100 debt collectors from 47 states, one territory and 11 countries.
In 2010, Mayor Michael Bloomberg announced that debt collection agencies must adhere to common sense guidelines regulating their interaction with New Yorkers. Those who make calls or send letters to collect debts must tell the debtor who is calling and from what agency, the original creditor, the amount of the debt they owe, and the name and phone number of a live person the debtor can call back.
Anyone contacted by a debt collection agency can request written documentation regarding the status and history of the debt. Consumers can download DCA’s Debt Collection Guide, check if a debt collector is licensed and file a complaint online at nyc.gov/consumers or by calling 311. They can also watch the DCA’s video about debt collection on YouTube in English and Spanish.
Last year, DCA received a total of more than 4,600 complaints and secured close to $5.5 million in restitution for consumers. To file a complaint with DCA or check the license status of a business, visit nyc.gov/consumers or call 311.
New Yorkers in need of free oneon one financial counseling can visit one of the city’s nearly 30 Financial Empowerment Centers by calling 311 to schedule an appointment. Since the pilot opened in 2008, the Centers’ financial counselors have helped more than 20,000 New Yorkers reduce their debt by almost $10 million.
Top 10 things to know about debt collection in New York City
1) All debt collection agencies that seek to collect personal or household debts from New York City residents must have a DCA license no matter where the agency is located. To verify if a debt collection agency is licensed, call 311 or search DCA’s Instant License Check online at nyc.gov/consumers.
2) In New York, a debt collector cannot collect or attempt to collect on a payday loan. Payday loans are illegal in New York. A payday loan is a high-interest loan borrowed against your next paycheck. To apply for a payday loan, you need to have a checking account and proof of income. In New York State, most payday loans are handled by phone or online. If a collection agency tries to collect on a payday loan, visit nyc.gov/consumers or contact 311 to file a complaint with DCA.
3) A debt collector cannot contact your employer, family, friends and neighbors about the debt or discuss it with them. A collector can only contact someone other than the consumer to locate the consumer.
4) A debt collection agency may not make false statements or threaten you. A debt collector cannot threaten to arrest you, report the consumer to immigration authorities or claim they are marshals or sheriffs. They can also not threaten to have you evicted, take or garnish your wages, take the money from your bank account, or take your personal belongings without first obtaining a judgment against you in court.
5) Debt collectors cannot call too early, too late or too often. In New York City, debt collectors cannot call you before 8 a.m. or after 9 p.m. They also cannot call you more than twice a week if the collector has made contact with you.
6) Debt collectors cannot lie about the amount owed. A debt collection agency cannot claim the debt owed is greater than it is or claim a consumer owes the debt when they do not.
7) A debt collection agency must tell you if the statute of limitations for collecting the debt has expired.
8) Beware of debt collection companies or companies working with debt collection companies that offer you a credit card if you repay, in part or in full, an old debt that may have expired. Companies may use terms like “Fresh Start Program” or “Balance Transfer Program” to describe offers to transfer your old debt to a new credit card account after you make a certain number of payments. If you accept the credit card offer and start making payments, the debt collection agency’s time limit (statute of limitations) for suing you to collect this debt will restart. The company offering the credit card may not tell you that this is a consequence of getting the credit card.
9) It is illegal for a debt collection agency to use “caller ID spoofing.” Some debt collection agencies are using spoofed (or faked) phone numbers to disguise their identities on caller ID. For example, a debt collector may use the number of a relative or government agency to get you to answer the phone. If you get a “spoofed” call from a debt collection agency, visit nyc.gov/consumers or contact 311 to file a complaint with DCA.
10) Protect your money. If a debt collection agency is unlicensed, fails to give you information required by law, or unlawfully threatens or harasses you, call 311 or visit nyc.gov/consumers to file a complaint with the Department of Consumer Affairs.
What to do if a debt collection agency contacts you
– Don’t ignore a collector.
– Check that the debt collection agency is licensed. Debt collection agencies must include their DCA license number in all letters sent to you. To verify if a debt collection agency is licensed, call 311 or search DCA’s Instant License Check online at nyc.gov/consumers.
– Check that the debt collection agency provided required information. By law, debt collection agencies must provide the following information in all communications to you: the name of the debt collection agency; the name of the original creditor; the amount of the debt and any fees; a call-back number to a phone that is answered by a live person, the name of that person (if your call is routed from the agency’s main telephone line, the live person qualified to handle your questions must answer the call within 60 seconds); and information about your right to dispute the debt
– Always request in writing that the debt collector send you written verification of the original debt even if you recognize the debt. Verification must include: a document from the original creditor that shows you made the purchase and owe the debt; a copy of the final account statement from the original creditor; a document that lists the total principal amount you owe (either the original amount borrowed or the part of the amount borrowed that remains unpaid minus any charges or fees) and each additional charge or fee you owe that separately lists the total for each charge or fee and the date each was incurred and a description of why you must pay the additional charge or fee.
– Once you request verification, a debt collection agency may not contact you to collect the debt until it sends you verification. Do not be pressured into making any payments until you have received verification of the original debt.
– Confirm if you owe the debt by checking your credit report.
– Check how old the debt is. If the statute of limitations on the debt is expired, the collector must disclose this information to you, along with information about your legal rights. The statute of limitations is the period of time that a creditor or collector can sue you in court to collect the debt.