On December 9, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had filed a complaint against a Missouri-based debt collection company in federal court in the Western District of Missouri. The CFPB alleges the company violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692e and 1692g and the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531 and 5536.
The company administers a pretrial-diversion program related to dishonored checks in conjunction with numerous district attorneys’ offices throughout the United States. When an individual writes a bad check, merchants report the check to the company, which in turn forwards it to the relevant district attorney. The company then attempts to contact the individual who wrote the bad check and attempts to enroll the individual in a diversion program, which requires the check writer to pay the outstanding debt, among other things.
The CFPB alleges that, in administering the program, the company used district attorney letterhead to attempt to collect debts and often did not actually refer cases to district attorneys’ offices for prosecution. The CFPB alleges the company failed to include disclosures required under the FDCPA and that its conduct was deceptive under both the FDCPA and the CFPA.
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