CFPB Settles With Debt Collection Company and CEO for $6 Million

CFPB sign

On July 13, 2018, the Consumer Financial Protection Bureau (CFPB) announced a settlement with a debt collection company and its CEO for allegedly illegal debt-collection acts and practices.

According to the CFPB, the company collected on consumer debts using various debt collection companies that allegedly engaged in unfair and deceptive practices in violation of the Consumer Financial Protection Act, 12 U.S.C. §§ 1031(a) and 1036(a)(1), (3), and the Fair Debt Collection Practices Act, 15 U.S.C.  §§ 1692e, 1692f.   Specifically, the CFPB claimed that these companies unlawfully inflated amounts owed on debts,  threatened to take legal action against consumers that they had no authority to take, and falsely claimed to be law enforcement or lawyers.  In addition to placing debt with or selling debt to these debt collection companies, the company and its CEO were accused of providing “other critical assistance” to these companies, including, drafting and helping to implement policies falsely indicating compliance with federal consumer financial laws.

​The consent order imposes a civil money penalty of $3 million against the company and $3 million against its CEO, the payment of which is partially suspended.  It further prohibits the company from engaging in certain collection practices and permanently enjoins the CEO from the debt collection business.