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Dealing With Debt Collectors

Many consumers struggle with what to do when they are contacted by a debt collector, especially when the collector is calling from a company they have never heard of. Under state and federal laws, you are protected from abusive, deceptive, and unfair debt collection practices. Set out below is more information on your rights when dealing with debt collectors, and tools and tips you can use to protect yourself from being defrauded into paying a debt you do not owe.

Always remember to keep records of your interactions with debt collectors, and if you have any problems with a debt collector, you can contact the Department for assistance.

Find out more about dealing with debt collectors:

Requesting Additional Information from a Debt Collector

If you are contacted by a debt collector that you don’t recognize or about a debt you don’t recall, you may want to request additional information from the collector.

Under federal law, if you request information on a debt collector within 30 days of the first contact, the debt collector must provide you verification of the debt, including information about the original creditor.

Under the Department’s debt collection regulations, New Yorkers have expanded rights to request additional information on most “charged-off” debts, which are defaulted debts that a creditor removed from its books, and then, typically, sold to another entity to collect. For example, this could be a defaulted credit card debt that was sold by your credit card company to another company to collect. 

You can make this information request, called “Substantiation of a Debt,” on the phone with a debt collector, although the collector may then require you to send a written request. Sending a written request for Substantiation of a Debt is the best way to request this information, because it provides a record of the request. 

Whether you make the request by phone or in writing, you should keep records of when you asked for information from the debt collector and when you heard back. When a debt collector receives your request, it must stop collection efforts until it provides you the requested information. The debt collector has 60 days to comply after receiving the request. If the collector does not provide the information to you within 60 days, or if the collector continues efforts to collect from you on the alleged debt despite your request for information, please report this to the Department.

Below is a sample letter you can use to request Substantiation of a Debt.

If you are not sure whether the debt you’ve been contacted about is the kind of “charged-off” debt for which you are entitled to Substantiation, you may still make a request for Substantiation of the Debt. Even if the collector advises that the alleged debt is not “charged-off”, you can still ask a debt collector for additional information. Legitimate debt collectors often provide, at your request, some proof that the collector has a right to collect the debt and is not a fraudster.

Note: This letter is not legal advice.


Protections from Harassment and Abuse

Debt collectors are not allowed to:

If you are being harassed, contact our Consumer Hotline at (800) 342-3736, or file a complaint with DFS.

Your rights:


Avoiding Debt Collector Scams

These fraudsters will try to collect money from consumers who already paid off their loans or debts to the legitimate creditor, or consumers who merely started an application for a loan, including a payday loan, but who never actually took out a loan. Fraudulent debt collectors use various tactics to scare the consumer into paying, including threatening arrest, legal action, garnishment of wages, and seizure of the consumer’s assets.

Don’t be victimized by this scam.  Be mindful of the following:

Phantom debt collection scams can take many forms.  These scams can target payday loan borrowers and consumers who have never taken out a payday loan.

If you have been contacted by somebody you believe is a phantom debt collector, or believe that you are the victim of a fraudulent debt collection scam, contact our Consumer Hotline at (800) 342-3736, or file a complaint with DFS.


Debt Collection Lawsuits

If you are sued or have been sued by a debt collector, the New York State Unified Court System has information on your rights, how to handle a debt collection lawsuit, and in some cases, how to overturn a wrongful judgment against you.

Find out more at the New York State Unified Court System’s website.


 

 

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