Consumer Alert: The governor signs new laws to protect you from debt collectors

ROCHESTER, N.Y. (WHEC) — Got debt? The governor just signed legislation designed to protect you. Many people don’t realize they have rights when the debt collector calls. And not knowing your rights can cost you big time.

The package of laws the governor signed this week addresses several different types of debt. First, let’s take a look at credit card debt and the newly signed Consumer Credit Fairness Act. In the state of New York, the statute of limitations on credit card debt used to be six years. This new legislation lowered the statute of limitations to three years. After that time period, debt collectors can’t sue you to get that money. So this legislation protects you from illegal lawsuits to try to recover old credit card debt.

Here’s why state legislators say this bill was necessary. Often old debt is sold to third-party buyers for pennies on the dollar. That old debt may have passed the statute of limitations. Often it’s already been paid or has been settled in bankruptcy court. But third party buyers file hundreds of thousands of illegal lawsuits against New Yorkers every year. And it’s up to you to hire a lawyer and prove you don’t owe the debt.

This new law is meant to stop those abusive lawsuits by forcing these companies to prove that it’s not suing to collect old debt and notify you when you’re being sued.

Also, you may know that debt collectors can’t abuse or harass you in the State of New York. (Click here for the New York consumer guide on debt collection. But be mindful that this guide has not yet been updated to reflect that the credit card statute of limitations has been reduced to three years, and utility companies now have to abide by certain rules.). For example, a debt collector can’t threaten you, claim the debt is greater than it is, call you before 8 a.m. or after 9 p.m. after having made initial contact.

They also can’t call more than twice a week, reveal your debt to neighbors, family friends or your employer.

But utilities were exempt. One of the laws signed by the governor Monday states that your utility company can’t abuse you either. And they can’t force you to take out large down payments to keep your lights, water or heat on. The state of New York has more comprehensive consumer protections than the federal government provides. So when the debt collector calls, know your rights.