Consumer Alert: Loans and debt? Here are your rights in New York

ROCHESTER, N.Y. This consumer alert concerns your debt. 

As I told you Monday, New York Attorney General Letitia James released her list of New Yorkers’ top 10 consumer complaints. And we discussed the top two: retail sales and renter issues. Debt, or rather the way debt is handled, was number three on the list.

I’m not surprised. I get lots of complaints about debt collectors. We’ll discuss your rights in just a moment. I was surprised by the fact that payday loans are on the list of top complaints. That’s a shocker because most payday loans are illegal in New York.

Payday loans got the name because folks are borrowing money until their next payday. But the loans are designed to keep you in debt because they have high fees and interest. So when you can’t pay the loan in two weeks, it has to be renewed or extended. The annual percentage rate is usually 400 percent or higher. These kinds of payday loans are illegal in the Empire State, but New Yorkers have unknowingly fallen victim.

Here’s what you need to know. Attorney General James says payday loans licensed by New York State can charge no more than 25 percent interest. If they are not licensed in New York state, interest is capped at 16 percent. These state laws do not apply to bank loans or credit cards.

The attorney general says you should be wary of short-term loans with other names. Here are some of them:

• Pension advances. Those require you to sign over all or part of your pension to get cash today, but the interest rates usually far exceed the legal limit in New York.
• Installment loans may look legitimate but carry an annual interest rate of 300 percent.
• Auto title loans also carry high annual interest rates, and one missed payment could mean that you lose your car.

According to the attorney general, New Yorkers also really complained about debt collectors last year.  You have rights.

• Debt collectors can’t call you more than seven times in any seven-day period.
• After making contact with you by phone, debt collectors must wait seven days before calling again.
• Debt collectors can’t call you between 9 p.m. and 8 a.m., local time.
• Debt collectors can’t contact you by email, text message, phone, or at work if you ask them not to.
• Debt collectors can’t contact you at your work email, public social media postings, or through third parties.

If they violate any of these mandates, you should complain to the NYS Attorney General’s Office as well as the CFPB.