New Yorkers complained more about shady debt collectors than about any other shady business last year, says the city’s Department of Consumer Affairs. The agency published its annual ranking of top consumer complaints today, and consumer debt collection fraud complaints topped the list for the first time since the city started counting forty years ago. The city reports a 70 percent jump in complaints about debt collectors from 2007.
Normally, the industry consumers complain about the most is that other New Yorker’s bete noir, home improvement contractors. This year, deceptive contractors slipped to second place, as the city processed around 1,200 complaints against illegal debt collectors.
Unfortunately, the biggest scam artists in the city may be falling under the agencies radar: debt collection buyers.
Debt buyers take over debt from stores and other creditors, usually paying pennies on the dollar, and then try to collect. The law has always been fuzzy around debt buyers and, unlike collectors, buyers have never been required to be licensed in New York.
Why a debt buyer doesn’t fall into the category of a collector, we don’t know. Earlier this week, we blogged about how the debt buying industry has exploded over the past two years, and that buyers have become even more aggressive during the recession. New Yorkers are reporting a major increase in illegal harassment tactics. Dan Garodnick, the young councilman from Stuyvesant Town, has sponsored a bill to regulate the buyers.
The city says it won $8 million in restitution for consumers last year, which, to their credit is significantly more than it won in previous years.
So… what companies should you be watching out for? An offender list to come…