A.G. Schneiderman Commends Chief Judge Lippman For Proposed Reforms To Consumer Debt Litigation Process

NEW YORK – Attorney General Eric T. Schneiderman today applauded New York’s Chief Judge Jonathan Lippman for proposing a comprehensive set of reforms to the legal process for consumer debt cases. The proposed reforms incorporate many of the recommendations made by Attorney General Schneiderman’s Consumer Frauds Bureau aimed at improving the process that governs the tens of thousands of debt collection lawsuits brought every year in New York State. 

“I commend Chief Judge Lippman for proposing these important reforms - ones that will promote a fairer legal process for thousands of consumers,” Attorney General Schneiderman said.  “The ability to collect a debt should not come at the expense of consumers, who have been abused time and again during the litigation process in New York.  I'm particularly pleased that the debt collection industry, like all other plaintiffs in New York courts, would be required to submit persuasive evidence prior to obtaining a ruling  – a great improvement from the status quo.”

The Office of the Attorney General receives thousands of complaints each year from consumers about debt collection activity in New York, making debt collection one of the top consumer complaints received by the Attorney General’s Office. Further, the office has repeatedly investigated unlawful or deceptive debt collection practices across a range of players in the debt collection industry, including creditors, debt buyers, debt collection agencies, law firms and process servers. Some recent examples of cases brought by the Attorney General’s office can be found here, here and here. The office is continuing to investigate other players in the debt collection industry.

In December, Attorney General Schneideman’s Office wrote to New York’s Office of Court Administration, which had solicited comments from the office and other interested parties, urging OCA to implement a comprehensive set of rules to ensure a fair legal process for consumers subject to debt collection litigation in New York. The proposed reforms announced by Judge Lippman today include many of the Attorney General’s suggestions. These include a requirement that debt collection plaintiffs submit an affidavit containing detailed and admissible proof in support of their default judgment applications, including an affidavit from the original creditor of the debt – often a bank or credit card company -- in actions brought by debt buyers.  The proposed reforms would also require the debt collector or its counsel to submit an affidavit testifying that the statute of limitations on its claims has not expired. In addition, the reforms would extend statewide a New York City Civil Court rule that is intended to ensure that consumers in debt collection cases are actually served with the summons and complaint.