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NYC Requires Collectors, Some Debt Buyers And Collection Lawyers To Be Licensed

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NYC laws can be a little different from the rest of the state !

The New York City Department of Consumer Affairs was recently asked to address an inquiry as to whether “debt buyers” that do not themselves engage in collection activities must be licensed by the Department. The Department responded that a purchaser or assignee of defaulted debt whose principal purpose is the collection of that debt, whether for itself or others, is a “debt collection agency” under New York City Administrative Code § 20-489 (a). Debt buyers that engage in debt collection activities must therefore be licensed by the Department in order to collect debts in New York City. New York City Administrative Code § 20-490.

A debt buyer that merely purchases or acquires defaulted debt but does not engage in collection activities itself does not require a license from the Department. Administrative Code § 20-489 defines a debt collection agency as “a person engaged in business the principal purpose of which is to regularly collect or attempt to collect debts owed or due or asserted to be owed or due to another.”

Read the rest here: http://www.newyorkbankruptcylitigation.com/2007/03/27/new-york-city-requires-collectors-some-debt-buyers-and-collection-lawyers-to-be-licensed/

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And from experience, knowing this and using this will help any NYC consumer in their battle against a collector. The NYC Department of Consumer Affairs will take action and while a private citizen can't sue to enforce the administrative code, one can make an unfair and deceptive practices claim for violation of the NYC admin code.

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This is indeed interesting, I recently received a duning letter with a lawyers letterhead, and it contained the following wording"...At this time no attorney with this firm has personally reviewed the particular circumstances of your account, it also doesn't include a License Number?

But, according to the cheat sheet found here http://www.creditinfocenter.com/rebuild/debt_validation.shtml

In NY, it relates the following.

Bond: No

License: No

Fee: No

Buffalo: $5,000 Bond - $50 fee

NYC: License - $150 - 2 yr. fee

Now, I reside in NY State, but, the lawyer's dunning letter is from NY City, so from the cheat sheet, I can only guess he(lawyer) has to be licensed in NY City since his practice is located in NY City, but again, NO License Number was included with the dunning letter, I replied by requesting a Verification, to include the entire history of the account being questioned, including a copy of the signed contract agreement, and any proof that the lawyer is representing the Credit Card Company, and/or has purchased the account in question from the Credit Card Company, On another Note, and not to deviate from the subject on this thread...

I also found an interesting article, part of which I will past here, regarding Attorneys dunning letters with the words...At this time No Attorney has personaly reviewed...

COMMUNICATION IS FROM AN ATTORNEY

Another popular recent debt collection technique is to have large numbers of collection letters, with implicit or explicit threats of suit, sent under the name of an attorney. The courts have recognized that "A debt collection letter on an attorney's letterhead conveys authority and credibility." The clear implication of any attorney letter is a threat of suit.

Unless the attorney has in fact reviewed the debtor's file and made a professional judgment that whatever action is threatened is appropriate, and the threatened action has been authorized by the creditor, the use of such letters is a violation of 1692e(3), which prohibits "[t]he false representation or implication that any individual is an attorney or that any communication is from an attorney."

In Clomon v. Jackson, the Second Circuit found that the use of an attorney's name in the letterhead and at the conclusion of the debt collector's dunning letter, where the attorney did not review the file, violated the FDCPA. The court concluded that "there will be few, if any, cases in which a mass-produced collection letter bearing the facsimile of an attorney's signature will comply with the restrictions imposed by 1692e."

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