Says This Will Crack Down on Predatory Behavior and Harassment within the Industry
Tanya Hobson-Williams, attorney at law at Hobson-Williams, P.C., says Governor Andrew Cuomo’s proposal to license debt collectors in New York State is a much-needed reform in the industry and will eliminate unethical practices by collectors in an effort to collect any unpaid balances.
On December 19, Governor Cuomo announced a proposal as part of the 2020 State of the State agenda that would require debt collectors to be licensed by the state’s Department of Financial Services. He said this would protect debtors from being subjected to predatory and abusive behavior by those looking to collect money for outstanding balances on credit cards, medical or utility bills. It would also give the state the power to revoke the licenses of those debt collectors who act in bad faith. (Currently, collection agencies attempting to collect a debt from New York City residents are required to be licensed by the New York City Department of Consumer Affairs.)
The governor cited federal statistics, in which 32% of Americans — including 25% of New York State residents — have a debt that is now in collections. According to the Federal Trade Commission (FTC), over three of the past four years, the most frequent consumer complaint about debt collectors was the use of harassment and abusive and deceptive debt collection practices; last year, the FTC received approximately 500,000 such complaints.
“This is a good thing for consumers, since there are many unscrupulous debt collectors who violate the Fair Debt Collection Practices Act,” Ms. Hobson-Williams says. “It gives consumers more protection and the state more power to investigate violations under the Act.”