Debt Collection Agencies Under Scrutiny at New York City Department Hearing

Complaints to New York City regarding suspicious or illegal debt collecting have risen 70 per cent over the past two years, according to a story running in today?s New York Times. The city finally decided to listen, and yesterday New York?s Department of Consumer Affairs detailed the extent of the growing problem during a public hearing.

More and more, officials said, collection agencies are resorting to illegal practices like making frequent and harassing phone calls, disregarding letters from consumers disputing the validity of debts, and passing on difficult cases to new collection agencies without first trying to resolve the disputes.

“People ought to pay their debts,” Jonathan B. Mintz, the city commissioner of consumer affairs, said. “But when debt-collection companies cross the line, which unfortunately they appear to be doing in an increasing way, then something has to change.”

Mark E. Davitt, president of ACA International, countered that the debt-collection industry recovered $39 billion last year and returned it to the United States economy, saving the typical household $351. He said his members not only obeyed all government regulations, but also followed a code of ethics adopted by the association.

David G. Peltan, director of compliance at Creditors Interchange, added that new employees are trained about the legal constraints on what they can say to persuade debtors to pay. Nonetheless, he said, some bad employees move from agency to agency. “You’re still ignorant of whatever their compliance history might have been with the prior agencies they came from,” he said.

You can read more about this story at Debt Collection Agencies Under Scrutiny at New York City Department Hearing.