Jun 02, 2014 Philip Burgess
Across the nation, debt collectors get an unfair reputation and are often seen as professionals the average consumer doesn't want to deal with. There is a element of truth here, of course - working with a debt collection agent means that you've defaulted on a loan and are likely facing financial problems. That being said, these individuals are more than likely willing to come up with a compromise that benefits all parties, a fact that often goes unadvertised.
After all, recovery agents do have a legitimate place in today's society and economic landscape. Think of it this way - if there were no repercussions, what would stop people from taking out loans, accruing medical bills and so on and never paying them back? Collectors help return money to businesses and allow the economy to run successfully.
However, some people are claiming that this practice is being unfairly curbed in New York. Anyone keeping an eye on the current state of the short term loan industry knows that officials in the state have been taking away consumers' rights to alternative credit for some time now. Currently, though, the state seems to have its eyes on the debt collection sector.
Debt buyers drop attempted collections
According to Bloomberg, both Portfolio Recovery Associates and Sherman Financial Group recently agreed to drop collections totaling about $16 million after facing pressure from representatives, because the individuals they were collecting from had debts that were considered too old.
The news source explained that these debts were unenforceable.
While, of course, collectors always need to stay within the letter of the law, it might be worth it to look into the details. Although a debt may be considered old and therefore unable to be collected, in some cases, if a consumer starts communications with the collection agency or pays even a small portion of the overall amount, it may be considered an open case once more.
Keeping an eye on new rules
Elsewhere in New York, insideARM reported, lawmakers are considering changing the rules. The source explained that New York State Courts Chief Judge Jonathan Lippman recently stated that he is looking to increase requirements debt buyers and collectors need to meet before they can recover sums.
The news provider referred to the proposed package as the "most comprehensive effort by a court system nationally." Implementation is expected to occur in mid-June. New requirements include mandatory pro-bono work, submittal of affidavits and the creation of user-friendly court forms.