Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Lawsky Proposes Debt-Collection Safeguards for New Yorkers

July 25 (Bloomberg) -- Benjamin M. Lawsky, New York State’s top bank regulator, is proposing new rules to protect consumers against abusive debt-collection practices.

“These reforms will help cut down on repeated, harassing phone calls from debt collectors,” Lawsky, who heads the state Department of Financial Services, said today in an e-mailed statement.

The rules are intended to prevent companies from seeking to collect debts from the wrong consumers for the wrong amount of money because of poor record-keeping, Lawsky said. They also would guard against the collection of so-called zombie debts, which have already expired. State residents have filed more than 13,000 complaints over debt collection practices, according to the statement.

Lawsky’s proposal would require collection agencies to verify that a debt is actually owed if a consumer disputes its validity and debtors must receive written confirmation of settlement agreements. Borrowers also would have the option to communicate with collectors through e-mail instead of by phone, according to the statement.

“Debt collectors frequently use abusive scare tactics to try to stack the deck against struggling families and squeeze outsized profits out of their financial misery,” Lawsky, 43, said in the statement.

Iowa Attorney General Tom Miller already is leading a multi-state effort to overhaul debt-collection practices, including the resale of debt by credit-card issuers to third parties. Action by the states would deal with “the sale of debt by the credit-card companies to the debt-buyers and what information they’d have to certify,” Miller said in an interview this month.

JPMorgan Chase & Co., the biggest U.S. credit-card lender, was accused by California in May of suing customers with defaulted credit-card debt without sufficient evidence.

To contact the reporter on this story: Keri Geiger in New York at kgeiger4@bloomberg.net

To contact the editor responsible for this story:

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.