Consumer Finance Insights
April 19, 2017

CFPB Files Complaint Against Ohio Debt Collection Law Firm Over Misrepresentations

​On April 17, 2017, the Consumer Financial Protection Bureau (CFPB) announced that it had filed a complaint in the U.S. District Court for the Northern District of Ohio against an Ohio-based debt collection law firm, alleging violations of the Fair Debt Collection Practices Act (FDCPA) and Consumer Financial Protection Act (CFPA).

The CFPB alleged that, since at least July 2011, the law firm had engaged in unlawful collection activities by misrepresenting the level of attorney involvement in demand letters and calls placed to consumers.  The firm collects debts on behalf of creditors and debt buyers, including debts from credit cards, installment loan contracts, mortgage loan deficiencies, and student loans.  According to the complaint, when the law firm acquired the right to collect on a new account, its representatives discussed the debt with the creditor, but those representatives were not always attorneys.  The law firm also performed a review of a sample of specific accounts, but that review was not always performed by an attorney.

The law firm would then send form demand letters representing that they were sent by a law firm.  The letters did not include a disclaimer stating that an attorney had not reviewed or formed an independent judgment as to the consumer’s debt.  According to the CFPB, because in most cases attorneys had not reviewed any individual account information in the consumer’s file prior to sending such letters, the law firm misrepresented that attorneys had reviewed the file and determined that the consumer in fact owed the amount demanded.

The law firm also placed collection calls to consumers.  Those calls were often conducted by non-attorneys, although the firm identified itself as a law firm during the call.  According to the CFPB, the firm’s statements during such calls implied that attorneys had reviewed the consumer’s file, when in fact they had not.

The CFPB seeks an injunction prohibiting the law firm from violating the FDCPA and CFPA, restitution, disgorgement, civil money penalties, and costs.