InfoBytes Blog
CFPB sues debt collectors
On January 10, the CFPB filed a complaint against three debt collection companies and their owners (collectively, “defendants”) for allegedly engaging in illegal debt-collection practices. According to the Bureau, the defendants purchase debt portfolios and place them with other collection companies or sell them. The complaint states that from September 2017 through April 2020, the defendants placed debts valued at more than $8 billion and asserts that the defendants knew or should have known that these third-party collection companies were engaging in unlawful and deceptive debt collection measures. The Bureau alleges the defendants were aware of the companies’ false statements to consumers because they received hundreds of complaints from consumers claiming the companies were threating to arrest or file lawsuits if the consumers’ debts were not paid imminently, and the defendants received recorded phone calls alerting them to the companies’ threats and false statements regarding credit reporting. Further, the Bureau claims that the defendants continued to place debts with and sold debts to these companies even after an internal review found major violations of federal law. The Bureau’s complaint, which alleges violations of the CFPA and the FDCPA, seeks consumer restitution, disgorgement, injunctive relief, and civil money penalties.