Manhattan
City Tightens Screws On Debt Collectors
Kelly Virella |
In the past 45 days, New York City has adopted two new policies that stand to help residents counter unlawful debt collection practices. But advocates say very little is being done to penalize the debt collectors who for years have broken pre-existing laws.The majority of the 300,000 New Yorkers sued annually for bad debt have their wages garnished and bank accounts emptied on fraudulent grounds, after their debt collectors don’t take suitable steps to notify them they are being sued, said Johnson Tyler, an attorney for South Brooklyn Legal Services who helps low-income people fight illegal debt collection. The Department of Consumer Affairs has received 2,667 debt collection complaints in the past three years, according to a fact sheet the department displayed at a press conference this week. In some cases, the Bloomberg administration has helped debtors ensnared by bad collectors get restitution for their losses. In the past three years, DCA restored $4.2 million in wrongful debt, charging back on average $1,559 per violating company, according to the fact sheet.The New York attorney general’s office is seeking restitution for other debtors and DCA has forced some violating companies to pay fines or surrender their licenses.