b'information to a CRA. If a notice of undeliverability isCFPB Settles With Nations Largest Debt Collector for received, the rule prohibits the debt collector fromover $15 Million, Resolving Alleged Violations of Prior furnishing information to a CRA unless certain additionalConsent Ordersteps are taken. The rule also prohibits debt collectorsIn October, the CFPB announced that it reached a from making threats to sue, or from suing, consumersproposed settlement with Encore Capital Group, Inc. on time-barred debt. (Encore), and its subsidiaries, Midland Funding, LLC; Midland Credit Management, Inc. and Asset AcceptanceOperation Corrupt Collector Capital Corp, which together comprise the nations In September, the CFPB along with the FTC and morelargest debt collector and debt buyer. In 2015, the CFPB than 50 federal and state law enforcement entitieshad entered into a consent order with Encore and its announced Operation Corrupt Collector, whichsubsidiaries, resolving allegations that the companies regulators described as a nationwide law enforcementviolated the CFPA, FDCPA, and FCRA in connection and outreach initiative to protect consumers fromwith their purchase of charged-off consumer debts and phantom debt collection and abusive and threateningsubsequent efforts to collect those debts. In September, debt collection practices. In 2020, Operation Corruptthe CFPB filed a new lawsuit against Encore, alleging Collector included five cases filed by the FTC; twoviolations of the 2015 consent order and the FDCPA cases filed by the CFPB; three criminal cases filed byand CFPA. Specifically, the September suit alleged the DOJ and U.S. Postal Inspection Service; and actionsthat defendants violated the consent order by suing brought by Arizona, California, Colorado, Connecticut,consumers in the absence of required documentation, Florida, Idaho, Illinois, Indiana, Massachusetts, Newusing attorneys to engage in collection activity Mexico, North Carolina, North Dakota, New York, Ohio,without providing required disclosures, and failing to South Carolina, and Washington. provide consumers with required loan documentation The FTC has taken the enforcement lead in Operationupon request. The Bureau additionally alleged that Corrupt Collector. For example, in September, the FTCthe companies initiated legal action to collect debts filed two cases alleging phantom debt collectionnotwithstanding that the statutes of limitations hada deceptive practice where companies attempt torun on these debts and without providing necessary collect on debts they legally have no right to collectdisclosures required by the 2015 consent order. Under or which the consumer does not owe. In one case, thethe settlement, the companies agreed to pay $15million FTC alleged: (1) that the defendants used robocallsin civil money penalties and over $79 thousand in to leave deceptive debt collection messages forconsumer redress. In addition to monetary relief, the consumers, falsely stating that the consumers wouldproposed settlement extends the terms of the 2015 be subject to legal action concerning these debts;consent order for an additional five years. and (2) that when the consumers returned the calls,CFPB Sides with Debt Collector in Third Circuit the defendants falsely claimed to be from a mediationFDCPA Caseor law firm, continuing their threat of legal action byIn Hopkins v. Collecto, Inc., No. 20-1955, an appeal using the consumers personal information to persuadepending in the U.S. Court of Appeals for the Third them the threat was sincere. In the other case, theCircuit, the CFPB filed an amicus brief supporting FTC alleged the defendants used similar unlawfulthe debt collectors position that it did not violate tacticsthe use of deceptive robocalls threateningthe FDCPA by sending the plaintiff a letter with an consumers with arrest if they failed to immediately payitemization of plaintiffs debt indicating $0.00 was the phantom debt. With former Commissioner Chopraowed in interest and collection fees. According to now tapped to lead the CFPB, we may see even greaterthe plaintiff, the debt collector (Collecto, Inc.) violated collaboration between agencies as part of OperationFDCPAs prohibitions on using any false, deceptive, or Corrupt Collector. misleading representation or means in connection with In addition to an enforcement crackdown, Operationthe collection of any debt or unfair or unconscionable Corrupt Collector includes plans to increase themeans to collect or attempt to collect any debt information available to consumers to understandbecause the itemization of interest and collection fees their rights when it comes to debt collection, includingfalsely implied to the least sophisticated consumer providing consumers with steps to take in response tothat such fees could begin to accrue, increasing the receiving a debt collection call for a debt they do notamount of consumers debt. The District of New Jersey recognize. A central aspect of the information initiativedismissed the complaint, and the plaintiff appealed. is an FTC-created online dashboard with informationIn the CFPBs amicus brief, it asserts that itemization about consumer reports concerning debts not oweddiscloses what has already happened, not what will and abusive and threatening collection practices. happen or may happen in the future. Thus, according 34'