The Consumer Financial Protection Bureau has entered into a consent order with two medical debt collection law firms and their president for alleged violations of the Fair Debt Collections Practices Act and the Fair Credit Reporting Act.
In its consent order, the CFPB found that, between January 2012 and August 2016, the firms’ standard practices implied lawyers were reviewing the veracity of a consumer’s medical debt when no lawyer had, in fact, reviewed the consumers’ files, which is an illegal debt collection practice under the FDCPA. The bureau also alleged that the firms violated the FDCPA by falsifying notarization of affidavits in lawsuits against consumers.
The firms’ violated the FCRA by furnishing consumer information for more than 1 million consumers to a credit reporting company without having any written policies or procedures regarding transmission of the consumers’ information to a credit reporting company or any protocols to ensure the accuracy and integrity of this information.
Redress. To remedy the firms’ FDCPA and FCRA violations, they will be required to:
- provide $577,135 in refunds to harmed consumers;
- stop using deceptive language in letters and collection calls;
- prohibit the unlawful notarization of affidavits;
- revise and enhance consumer credit reporting protections; and
- pay a civil money penalty of $78,800
Intimidated consumers. Commenting on the consent order, CFPB Director Richard Cordray stated, "Misrepresenting that a lawyer is involved in a debt collection action gives the collection a false weight. Works and Lentz intimidated consumers with unfounded threats of potential lawsuits. Today we are putting a stop to that and getting consumers the relief they deserve."
Companies: Works & Lentz, Inc.; Works & Lentz of Tulsa, Inc.
MainStory: TopStory ConsumerCredit CFPB DebtCollection DoddFrankAct EnforcementActions FairCreditReporting
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