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Dreher Tomkies LLP
Attorneys at Law
2750 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone (614) 628-8000
Fax (614) 628-1600



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NEW YORK AG INVESTIGATING DEBT COLLECTORS FOR ILLEGAL COLLECTION PRACTICES

New York Attorney General Andrew Coumo recently announced that his office has launched an investigation of nearly 20 companies and law firms operating as debt collectors throughout New York. The AG said that the investigation is designed to uncover debt collectors who engage in illegal collection practices, including debt collectors who (i) fraudulently threaten consumers with criminal prosecution, (ii) make harassing phone calls to consumers and their families, friends and employers, (iii) bring lawsuits and/or report consumers to credit reporting agencies without verifying that the consumer being targeted actually owes the debt and (iv) fail to disclose that a caller is working for a debt collector. As part of the investigation, the AG issued subpoenas to determine the debt collectors’ federal and state compliance policies, complaint response procedures and individual collector compensation structures.

The AG’s investigation already has resulted in a court order requiring two debt collection companies to shut down and their owner to pay restitution to consumers who paid debts that they did not owe. The order also permanently bars the companies and their owner from engaging in debt collection business and engaging in certain brokerage activities. According to the AG, the companies violated both the federal Fair Debt Collection Practices Act and New York debt collection and consumer protection laws by falsely accusing consumers of criminal activity, falsely threatening consumers with criminal prosecution and lawsuits, collecting debts beyond the six year statute of limitations, communicating with third parties regarding debts and failing to provide legally required validation notices.

The AG’s investigation serves as a reminder to collectors to periodically review their collection practices and policies and procedures for compliance with applicable federal and state law.

  • Margaret Stolar and Charles Gall

DEALING WITH MULTISTATE DEBT COLLECTION COMPLIANCE?
We routinely advise on collection-related activities and the regulated activities of creditors, third party debt collectors, debt buyers and loan servicers. We also publish an easy-to-use reference that compiles state and federal laws governing debt collection practices. The Debt Collection Digest is organized topically, includes the federal Fair Debt Collection Practices Act and Commentary for easy cross-reference, and covers ADAD and monitoring and recording statutes. The Digest covers both consumer and commercial collections and includes a detailed analysis of statute applicability, as well as supplemental information such as codes of conduct. Creditors, subsequent holders, third party collectors, debt buyers and loan servicers should find the Digest an invaluable resource for collection program development, management and regulatory compliance. Contact us for details.