NY’s AG goes after Debt Collectors

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Friday, July 24th, 2009

I wonder if the debt collection industry in NY is annoyed and angry at New York’s Attorney General yet? He just doesn’t quit bothering them and is probably leaving really scary messages on their voicemail. The Daily News reported that State Attorney General Andrew Cuomo on Wednesday asked a judge to void 100,000 faulty default judgments overzealous debt collectors used to freeze bank accounts across New York.

Cuomo is investigating a wave of complaints about companies that intimidate people who’ve already paid their debts or didn’t owe in the first place with harassing phone calls and mailings.

He’s issued subpoenaes to 20 companies seeking documents. Now he’s set to target one of their most powerful weapons – the default judgment.

Collectors get courts to freeze a debtor’s bank accounts through default judgments. In many cases, the victims don’t even know they’ve been targeted until they try to pay bills and don’t have access to their money.

These judgments harm a person’s credit and can require a target – including one who owes nothing — to hire a lawyer to clear up the mess.

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