The New York Fair Debt Collection Act

Debt collection is the principal subject of consumer complaints received by the New York State state consumer protection agency. The Fair Debt Collection Practices Act (FDCPA) is intended to prevent abusive, deceptive, and other unfair debt collection practices. The FDCPA applies to those who collect debts owed to creditors for personal debts, including car loans, mortgages, charge accounts and money owed for medical bills.

A debt collector (someone hired to collect money) is prohibited by federal law from engaging in the following activities:

• Contact you at unreasonable times or places, for example, before 8AM or after 9 PM., unless you agree, or at work if you tell the debt collector your employer disapproves.
  
  
• Contact you after you write a letter to the collection agency telling them to stop, except to notify you if the debt collector or creditor intends to take some specific action.
  
  
• Contact your friends, relatives, employer or others and tell them you owe money. Unfortunately the law allows one big exception, to find out where you live and work.
  
  
• Harass you by threatening to harm you or your reputation, use of profane language or repeated telephone calls.
  
  
• Make any false statement, including that you will be arrested.
  
  
• Threaten a payroll deduction or to sue you, unless the collection agency or creditor actually intends to and has the legal right to do so.
  
  

You have a right to a written notice to sent within 5 days after you are first contacted. Request it. The notice must tell you the amount owed, the name of the creditor, and what action to take if you believe you do not owe the money. If you do not owe the money or do not owe the amount shown in the notice, immediately contact the creditor in writing and send a copy to the debt collection agency with a request not to contact you. If these actions do not result in a satisfactory conclusion, you should file a complaint, with the New York State Consumer Protection Board.

If a debt collection has been started against you because you co-signed on a loan, you are fully responsible for payment on the debt regardless of who has possession of or holds title to the goods purchased. There is no requirement that the creditor try to recover the product or to collect from the person who purchased the goods before they come after you as the co-signer. After all they required a co-signer because they knew that the buyer had poor credit and probably an income too small to warrant the purchase price.

The co-signer often enters into the obligation without a full understanding of the potential liability. A co-signer is not signing as a reference but is signing that he or she is promising to pay any outstanding amounts owed if the purchaser defaults. The law requires the creditor to give a co-signer a completed copy of the contract and before the co-signer signs the contract, a written disclosure explaining that the co-signer is agreeing to pay the debt although he or she may not receive the goods or services. It must also state that you may be sued even if the consumer is able to pay, and you may be liable for additional fees including finance and delinquency charges, attorney’s fees, and court costs. Your only release from these obligations is if the creditor fails to comply with notification of these disclosures.