New rules for NYC collections agencies could let consumers consolidate debt in peace

While debt collectors are an important part of the consumer financial ecosystem, some agencies have been accused of threatening, harassing, and lying to consumers in pursuit of unpaid debts. The mayor of New York, Michael Bloomberg, recently announced tough new restrictions on those companies.

Bloomberg said that "the measures we are announcing today will help stop this rising tide of wrongful and financially harmful collection tactics, and protect New Yorkers from their often damaging consequences."

The mayor and consumer affairs commissioner Jonathan Mintz assert that some collection agencies routinely harass people who have the same names as their targeted debtors, making little to no effort to ascertain whether the person actually owes them any money.

Experts say that consumers should make every effort to repair their financial troubles before collection agents are brought in, however. Reputable credit counseling services can help stop a slide into debt that might otherwise cause creditors to take drastic action against a consumer. A consumer’s credit rating is also endangered by a referral to a collections agency.