Consumer Finance Insights
September 11, 2015

Debt Collectors Enter Consent Orders with CFPB for FDCPA Violations

​On September 9, the Consumer Financial Protection Bureau (CFPB) announced that it entered into consent orders with two large debt purchasers for alleged violations of the Fair Debt Collection Practices Act, Consumer Financial Protection Act, and Fair Credit Reporting Act.  CFPB alleged that the companies purchased debts that they knew or should have known were inaccurate or unenforceable.  CFPB further alleged that the companies attempted to collect on these unverified debts; unlawfully collected debts through lawsuits and threat of legal action; and used other illegal collection practices, such as harassing collection calls or misleading consumers into consenting to receive autodialed cell phone calls.

Under the consent orders, the companies are prohibited from continuing various practices, including: collecting debts without substantiation; reselling debt to third parties; threatening or filing lawsuits without intent to prove the debt; filing false or misleading affidavits; deceptively collecting time-barred debt; and engaging in excessive and inconvenient phone calls.  The companies must also release or vacate judgments and dismiss lawsuits where it misrepresented that the debt was enforceable, and are subject to reporting requirements.  One company is required to pay up to $42 million in restitution and $10 million in civil penalties.  The other company is required to pay up to $19 million in restitution and pay $8 million in civil penalties.