Banking and Finance Law Daily CFPB enters proposed judgment against debt collector
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Friday, October 16, 2020

CFPB enters proposed judgment against debt collector

By Colleen M. Svelnis, J.D.

The CFPB has announced a proposed judgment against a debt collector for violations of federal debt collection and consumer protection laws.

The U.S. District Court for the Southern District of California has entered a Stipulated Final Judgment and Order against Encore Capital Group, Inc., and its subsidiaries, Midland Funding, LLC; Midland Credit Management, Inc.; and Asset Acceptance Capital Corp, companies who comprise the largest debt collector and debt buyer in the United States. When finalized, the order will require Encore and its subsidiaries to pay over $78,000 in redress to consumers and a $15 million civil money penalty.

In its complaint, the Bureau alleged that Encore and its subsidiaries violated the Fair Debt Collection Practices Act and Consumer Financial Protection Act. The complaint also alleged violations of violated a 2015 consent order with the Bureau which was based on previous findings that they violated the Consumer Financial Protection Act, Fair Debt Collection Practices Act, and the Fair Credit Reporting Act (see Banking and Finance Law Daily, Sept. 9, 2020).

According to the Bureau, the companies sued consumers without possessing the required documentation, using law firms and an internal legal department to engage in collection efforts without providing required disclosures, and failing to provide consumers with required loan documentation after being requested to do so by consumers; by suing consumers to collect debts notwithstanding that the statutes of limitations had expired on those debts; and attempting to collect expired debts without providing required disclosures.

The Bureau further alleged that the companies violated the CFPA by failing to disclose possible international-transaction fees to consumers, thereby effectively denying consumers an opportunity to make informed choices of their preferred payment methods.

In addition to the redress and penalties, the companies must make various material disclosures to consumers, refrain from the collection of time-barred debt absent certain disclosures to consumers, and abide by certain conduct provisions in the 2015 consent order for five more years.

Companies: Encore Capital Group, Inc.; Midland Funding, LLC; Midland Credit Management, Inc.; Asset Acceptance Capital Corp.

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