June 17, 2010
The New York General Assembly is considering a bill giving consumers added protection from abusive debt collectors. This week New Yorkers who've experienced abusive debt collectors firsthand pressed lawmakers to pass the measure -- the Consumer Credit Fairness Act.
The Act (S.4398-A, A.7558-A), introduced by Senator Eric Schneiderman and Assembly member Helene Weinstein, would prevent debt buyers -- which buy old debts for pennies on the dollar -- from routinely filing meritless lawsuits and getting judgments on invalid debts. Banks and debt collectors are opposing the measure.
"These debt buyer lawsuits are especially abusive because New Yorkers often receive no notice that they were sued until after judgments have already been entered against them," said Robert Martin, Associate Director of DC 37 Municipal Employees Legal Services. "Debt buyers wreak havoc on people's lives by using these judgments to freeze people's bank accounts and garnish their wages."
Monica Williams, a 61-year-old, disabled Brooklyn resident, did not even find out that she had been sued until a debt buyer froze her bank account.
"My rent check bounced, and I had to borrow money from my son to pay my rent, food, and utilities," she said. "They sued me for far more money than I ever owed, and I had no chance to fight it. What happened to me should not happen to anyone. There needs to be a law to prevent these abuses."
Lloyd Greenspan, 51, of Manhattan, fell behind on his credit cards when he lost his job after 9/11. Years later, he was sued by a debt buyer.
"I had never heard of the company before and did not know what the debt was for," Greenspan said. "When I asked them for basic information about the debt, they could not give me a single piece of paper. I don't think companies should be able to sue New Yorkers without being able to explain what they are suing them for."
"The Consumer Credit Fairness Act would close gaps in existing laws that allow the worst actors to reap huge profits from abusive and illegal debt collection practices," said Carolyn Coffey, Senior Staff Attorney at MFY Legal Services.
"This bill will protect low-income, elderly, disabled, and other New Yorkers from unscrupulous debt collection practices," said Lois Aronstein, AARP NY State Director. "We call on the Senate and Assembly to stand up to the banking and debt collector lobbyists and pass this critical legislation before the end of the session ."
