Consumer Finance Insights
February 17, 2017

Student Loan Debt Collector Settles with FTC for $700,000 Over Alleged FDCPA and FTC Act Violations

On February 14, 2017, the Federal Trade Commission (FTC) announced that it had entered into a stipulated order with a student loan debt collector, resolving allegations that the debt collector violated the Fair Debt Collection Practices Act (FDCPA) and Federal Trade Commission Act (FTC Act) in its servicing of over two million accounts in 2014.  In its complaint, which was simultaneously filed in the U.S. District Court for the Southern District of Texas, the FTC alleged that the debt collector left voicemail messages disclosing consumers’ debts to third parties without their permission.  In addition, after allegedly being informed by some consumers that they were not the individuals who owed the debts, the debt collector continued to call those consumers attempting to collect the debts (despite promising not to).  The FTC alleged that these practices were “unfair or deceptive acts” in violation of Section 5(a) of the FTC Act, were attempts to collect debts through false representations and unlawful means in violation of Section 807(10) of the FDCPA, and were third-party disclosures about a debt in violation of Section 805(b) of the FDCPA.  Under the terms of the settlement with the FTC, the debt collector agreed to pay a $700,000 civil money penalty and to reform their debt collection practices.