Dodd-Frank News Center

CFPB sues Maryland debt collection entities and CEO over alleged FCRA, FDCPA violations

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has filed a lawsuit against FCO Holding, Inc., and its subsidiaries, Fair Collections & Outsourcing, Inc.; Fair Collections & Outsourcing of New England, Inc.; and FCO Worldwide, Inc., as well as Michael E. Sobota, the chief executive officer, president, director, and owner of FCO Holding, Inc. All of the entities are Maryland-based debt collectors that operate collectively under the names Fair Collections & Outsourcing and FCO, the Bureau said.

The Bureau alleges that FCO violated the Fair Credit Reporting Act, Regulation V, and the Consumer Financial Protection Act by, among other things, failing to establish or implement reasonable written policies and procedures regarding the accuracy and integrity of the information it furnished to consumer reporting companies, specifically with respect to its handling of indirect disputes. The Bureau also alleges that FCO and Sobota violated the Fair Debt Collection Practices Act when FCO represented that consumers owed certain debts when FCO did not have a reasonable basis for such assertions.

The Bureau's complaint seeks an injunction, as well as damages, redress, disgorgement of alleged ill-gotten gains, and the imposition of a civil money penalty.                            

 

Nationwide debt collector settles CFPB charges

This story appeared in Bank Digest.                                   

Financial Credit Service, Inc., an Illinois-based debt collector that engages in collections across the nation under the name Asset Recovery Associates, Inc., has agreed to settle Consumer Financial Protection Bureau charges that its collection tactics violated the Fair Debt Collection Practices Act and Consumer Financial Protection Act. According to the Bureau, the company threatened to sue consumers, have them arrested, garnish their wages, or place liens on their homes even though it did not intend to do so. The company also told consumers that the debts would harm their credit ratings, even thought it did not make reports to consumer reporting agencies. Additionally, the company misrepresented that employees were attorneys, the CFPB said.

Under the settlement agreement, the company will pay a $200,000 civil penalty and at least $36,800 in restitution to victimized consumers.

 

CFPB proposes debt collection disclosure information collection

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau is proposing a new information collection entitled "Debt Collection Quantitative Disclosure Testing." The CFPB is seeking Office of Management and Budget approval to conduct a web survey of 8,000 individuals as part of the Bureau's research on debt collection disclosures. The survey will explore consumer comprehension and decision making in response to debt collection disclosure forms, according to the Bureau.

The CFPB previously published a 60-day Federal Register notice on this proposal on June 5, 2017, as well as a 30-day notice on Nov. 14, 2017, but the latter request was withdrawn after submission to the OMB. The Bureau is now republishing a 30-day notice for this collection and resubmitting it to the OMB. Written comments on the current notice must be received by March 6, 2019.

 

CFPB issues report on collection of telecommunications debts

This story appeared in Bank Digest.  

The Consumer Financial Protection Bureau has released its latest "Quarterly Consumer Credit Trends" report, this one focusing on the reporting of debt collections for telecommunications services (telecom collections) to nationwide consumer reporting agencies. The report documents the prevalence and dollar value of telecom collections and illustrates industry practices in the collection and reporting of telecommunications debts.

The report analyzes telecom collections in the last five years and also examines changes in credit scores after a telecom collection appears on a credit report. According to the report, about 22 percent of credit records included at least one telecom-related item at some point between mid-2013 and early 2018, and these items were disproportionately for collections.

CFPB sues debt-settlement services provider for allegedly deceiving consumers

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has taken action against Freedom Debt Relief, LLC, the nation's largest debt-settlement services provider, and its co-CEO Andrew Housser for allegedly deceiving consumers. The CFPB alleges that Freedom charges consumers without settling their debts as promised, makes customers negotiate their own settlements, misleads them about its fees and the reach of its services, and fails to inform them of their rights to funds they deposited with the company.                                   

According to the CFPB's release, the Bureau is seeking compensation for harmed consumers, civil penalties, and an injunction against Freedom and Housser to halt their unlawful conduct.

 

 

CFPB requests new 'debt collection disclosure' information collection

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau is requesting a new information collection entitled "Debt Collection Quantitative Disclosure Testing." According to the CFPB's notice, the bureau plans to seek approval from the Office of Management and Budget to conduct a web survey of approximately 8,000 individuals as part of the bureau's research on debt collection disclosures.

The survey will explore consumer comprehension and decision making in response to debt collection disclosure forms. Written comments must be received by Aug. 4, 2017.

CFPB and Justice Department file amicus brief in FDCPA case

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau, along with the Justice Department, has filed an amicus brief with the U.S. Supreme Court in a case concerning whether a debt collector violates the Fair Debt Collection Practices Act by knowingly filing a proof of claim in a consumer's bankruptcy proceeding to collect debt for which the statute of limitations has expired. The amicus brief argues that such a filing constitutes a misleading representation and an unfair means to collect a debt in violation of the FDCPA, and that the Bankruptcy Code does not preclude a debt collector from being held liable for those violations.

CFPB's monthly snapshot features debt collection complaints

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau’s monthly complaint snapshot for December 2016 features consumer complaints about debt collection. The report also highlights trends seen in complaints coming from Arizona and the Phoenix metro area.

The bureau said the most common complaint about debt collection has to do with attempts to collect on a debt that the consumer says is not owed. In addition, the bureau said debt collection is the most-complained-about product or service in Arizona, with debt collection complaints from Arizona consumers exceeding the national rate.

Brown issues statement on CFPB's proposed debt collection rules

This story appeared in Bank Digest.

Senator Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, has issued a statement on the Consumer Financial Protection Bureau's initial outline of proposed rules to overhaul the debt collection market. According to Brown's press release, the CFPB's proposal would affect a broad range of industries and would require collection companies to verify debts before contacting consumers, improve the dispute process, and limit the number of times a collector can call or email consumers.

In his statement, Brown said, "Families who are struggling to make ends meet shouldn't be harassed to make payments on debts they've already paid off or never owed in the first place." He also called the CFPB's proposal "an important first step to protecting consumers from predatory debt collectors and making sure this industry operates with clear rules of the road and strong oversight."