NY Debt Collectors Face Possible Negative Changes in Law

By Marti Lythgoe, National List Editor, and Scott Wortman, Esq., Partner at MSH

When I saw “New York Assembly Passes Debt Collection Bill; Also Lowers Statute of Limitations” on insideARM 4/25/13, I immediately contacted Scott E Wortman, Esq., Partner at Mel S. Harris & Associates, LLC (“MSH”) and the author of the NL White Paper on NY Debt Collection Law, and asked for an interview. I knew he wouldn’t be happy about the implications of this bill, and I was sure he would have some very interesting things to say about it. He did! What follows are some of the questions I asked him and his candid, outspoken responses.
What is the main purpose of the bill? (Titled the “Consumer Credit Fairness Act”)
That depends on who you ask. Some consumer advocacy groups would say that the purpose behind the bill is to broadly protect consumers from unscrupulous debt collectors. There is also an assertion by the Bill’s sponsor, Judiciary Committee Chair Assembly Member Helene Weinstein that “This bill… helps to address the long-term impact of economic abuse, including identity theft, which is often suffered by domestic violence victims at the hands of their abusers.”
From my perspective, the bill’s intended focus does nothing to stop only unscrupulous debt collectors, nor does it mention a tangential link between any of the proposed changes to the CPLR (Civil Practice Law and Rules) and victims of domestic violence. As a person who used to work in the social service field, my heart goes out to all victims of both emotional and physical abuse, but there is no nexus between this bill and protecting victims of domestic violence. Rather, the bill relates to (1) the veracity of records when filing a complaint and filing for a judgment on default; and (2) improved notice of litigation for consumers. However, the Bill fails to address these issues in a reasonable manner. Instead, it effectively eliminates any collection of receivables. It does this by creating impractical standards and regulations that cannot be overcome by simply amending internal policies and procedures. More importantly, reading this bill from the standpoint of a consumer, it paradoxically impairs those consumers the Act purports to assist by making it impossible for them to improve their credit rating and qualify for loans.

Read the complete white paper, NY Debt Collectors Face Possible Negative Changes in Law.