A consumer advocacy group in New York City has collected more than 3,000 signatures on a petition that asks Gov. Andrew Cuomo to halt private debt collection in New York state. The group is also soliciting stories from individuals who have been contacted by debt collectors and is sharing those stories with the mainstream media.
In an editorial published this morning, the New York Daily News is taking up the call of the advocacy, calling private debt collection during the coronavirus pandemic an “abomination” and requesting that, along with student debt and medical debt, all private debt collection be turned off for the duration of the crisis.
In ordinary times, private debt collection is important, if unsavory; creditors who are owed money should be made whole, to the extent possible, in cases when debtors default on their obligations.
When a viral outbreak and economic lockdown has wiped out paychecks, when every frozen bank account is potentially locking someone out of the funds they need for food and medicine, private debt collection is an abomination.
In reading the stories that the advocacy group has posted and shared, some of the situations are not necessarily the direct result of actions taken by debt collectors. In some cases, court cases were stayed because courts have shut down during the COVID-19 pandemic. But the underlying message is one that companies in the credit and collection industry have been hearing since the country began shutting down a month ago: collectors have to stop collecting.
There does appear to be some gaps in what the advocacy group is calling for. On its call to action, for example, it is asking people to sign its petition to “urge Governor Cuomo and the Office of Court Administration to immediately halt all debt collection in New York.”
But the advocacy group is also calling on consumers to contact the office of Gov. Cuomo because nobody “should face the unacceptable health risk of going to the courthouse to defend against a debt collection lawsuit, or find herself without access to her funds, unable to buy food, medicine or other necessities, because of a debt collection judgment.”
That makes it unclear whether the group wants all debt collection activities prohibited or just legal collection and garnishments. Regardless, the calls to halt debt collection are not going away and will remain a challenge the industry will need to face head-on.
