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Financial Services Law Insights and Observations

CFPB files claims against Maryland debt collectors

Federal Issues CFPB FCRA Enforcement FDCPA Credit Reporting Agency Credit Report Debt Collection CFPA

Federal Issues

On September 25, the CFPB filed a complaint in the U.S. District Court for the District of Maryland against a debt collection entity, its subsidiaries, and their owner (collectively, “defendants”) for allegedly violating the Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), and the Consumer Financial Protection Act (CFPA). In the complaint, the Bureau alleges that the defendants violated the FCRA and its implementing Regulation V by, among other things, failing to (i) establish or implement reasonable written policies and procedures to ensure accurate reporting to consumer-reporting agencies; (ii) incorporate appropriate guidelines for the handling of indirect disputes in its policies and procedures; (iii) conduct reasonable investigations and review relevant information when handling indirect disputes; and (iv) furnishing information about accounts after receiving identity theft reports about such accounts without conducting an investigation into the accuracy of the information.   The Bureau separately alleges that the violations of the FCRA and Regulation V constitute violations of the CFPA.  Additionally, the Bureau alleges that the defendants violated the FDCPA by attempting to collect on debts without a reasonable basis to believe that consumers owed those debts. The Bureau is seeking an injunction, damages, redress to consumers, disgorgement, the imposition of a civil money penalty, and costs.

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