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Financial Services Law Insights and Observations

CFPB and debt relief company agree to permanent injunction

Courts CFPB Payment Processors CFPA FDCPA UDAAP Debt Collection Enforcement


On October 20, the U.S. District Court for the Northern District of Georgia entered a default judgment and order against five participants in an allegedly illegal debt collection scheme involving certain payment processors and a telephone broadcast service provider (collectively, “default defendants”) for their role in the operation. As previously covered by InfoBytes, in 2017, the U.S. District Court for the Northern District of Georgia dismissed claims brought by the CFPB against the default defendants. (See additional InfoBytes coverage here.) According to a complaint filed in 2015, the defendants “knew, or should have known” that the debt collectors were contacting millions of consumers in an attempt to collect debt that consumers did not owe or that the collectors were not authorized to collect by using threats, intimidation, and deceptive techniques in violation of the CFPA and the FDCPA.

The court entered a $5.1 million judgment against the default defendants, who are jointly and severally liable with the non-default defendants. The default defendants must pay civil monetary penalties ranging from $100,000 to $500,000 to the Bureau. The judgment also, among other things, permanently bans the default defendants from attempting collections on any consumer financial product or service and from selling any debt-relief service.

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