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Financial Services Law Insights and Observations

Bank to pay $3.5 million to settle debt collection call suit

State Issues Settlement Debt Collection Consumer Protection Consumer Finance

State Issues

On November 15, a statewide team of California district attorneys announced a $3.5 million settlement to resolve allegations concerning a Utah-based bank’s debt collection activities. The California Debt Collection Task Force handled the investigation and charged the bank and its agents with allegedly placing harassing and unreasonably excessive collection calls, sometimes even after consumers informed the bank they no longer wished to receive the calls. While the bank did not admit to wrongdoing, it agreed to pay $3.5 million, including $2 million in civil penalties and $975,000 in investigation costs. The bank will also pay $525,000 to a charitable trust fund to go towards additional consumer protection efforts. Additionally, the judgment requires the bank to “implement and maintain policies and procedures to prevent unreasonable and harassing debt collection calls to California consumers, including limiting the total number of calls to each debtor and honoring consumer requests for calls to stop.”

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