In late April, the New York State Assembly approved the Consumer Credit Fairness Act, which aims to rein in abusive debt collection practices – particularly on the part of debt buyers. According to a press release issued by Assembly Speaker Sheldon Shilver, A. 2678 (Weinstein) would:
- Require notice of a pending consumer credit action to be mailed to the defendants by the clerk of the court;
- Require court filings to include more information about the debt targeted in a lawsuit, such as identifying the debt or account and providing proof that the debt is owed to the plaintiff;
- Lower the statute of limitations for consumer credit transactions from six years to three years, and eliminating the right to collect the debt once the statute of limitations is expired; and
- Terminate the ability of debt buyers to sue on expired debt.
According to Silver, “There is an epidemic of unfair debt collection lawsuits in New York State. In many instances, these actions are brought against low and moderate income New Yorkers who are not aware a lawsuit has been filed against them, leaving them with little recourse and ruining their credit for many years. Unfortunately, the justice system is being abused by unscrupulous third party debt buyers and harming vulnerable New Yorkers. This bill would institute several measures to address these abusive debt collection practices and combat this menace.”
The bill has moved to the Senate, where it will be heard by the Judiciary Committee.