The [New York] Department of Financial Services announced on Wednesday that it had filed a statement of charges against debt collector Forster & Garbus LLP.
DFS alleges that Forster & Garbus, over the course of years, failed to treat consumers as required by the law.
Overall, Forster & Garbus did not honor requests by consumers for substantiation of debt, that is, requests for information proving the validity of the debt and Forster & Garbus’s right to collect the debt. New York law requires that substantiation be provided within 60 days of any such request, and describes the particular kinds of documentation a collector must show to substantiate the debt.
“Consumer protection is the center of everything we do at DFS,” said Superintendent of Financial Services Linda A. Lacewell. “It is especially important for New Yorkers to have access to appropriate and accurate financial information during this stressful time – so they can protect their rights and make financial decisions in their own best interest.”
These charges are the first to allege violations of New York State’s Debt Collection Regulation, Part 1 of Title 23 of the New York Codes, Rules, and Regulations, promulgated in 2015.
Forster & Garbus collects, among other types of debt, student loan debt for some of the largest student loan lenders and servicers in the United States. These student loan lenders and services, including Sallie Mae and Navient, have assigned to Forster & Garbus several thousand student loan debt accounts since the promulgation of Debt Collection Regulation.
In the statement of charges announced today, the Department alleges that Forster & Garbus failed to comply with substantiation requirements in several ways, including:
- failing to provide any substantiation;
- failing to provide substantiation within required timeframes; and
- providing insufficient substantiation by omitting, for example, underlying transaction documents.
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