DFPI launches debt collection investigation

State Issues State Regulators DFPI Debt Collection Enforcement

On January 19, California’s Department of Financial Protection and Innovation (DFPI) announced the issuance of subpoenas to a dozen debt collection companies as part of its investigation into consumer complaints about alleged unlawful, unfair, deceptive, or abusive debt collection practices. This is DFPI’s first significant action since the California Consumer Financial Protection Law—which, among other things, expanded DFPI’s UDAAP authority by adding a prohibition on “abusive” acts or practices to California law—went into effect January 1 (covered by a Buckley Special Alert). According to DFPI, consumers across the country have filed complaints against the companies, alleging the debt collectors make repeated phone calls, fail to validate debts, and threaten to sue consumers for debts they do not owe. DFPI notes that the state’s new Debt Collection Licensing Act (enacted last September and covered by InfoBytes here) requires a person engaging in the business of debt collecting in the state of California to be licensed and provides for the regulation and oversight of debt collectors by the agency.