On September 29, the CFPB, in partnership with the FTC and numerous federal and state law enforcement agencies, announced a nationwide effort addressing “phantom debt collection” and abusive and threatening debt collection practices. The initiative has been titled “Operation Corrupt Collector.” 

Phantom debt collection (also known as fake debt collection) covers a range of practices, including attempts to collect on obligations that consumers never took out or received, as well as efforts to recover loans without authorization from the creditor. The FTC has been active in this space for some time, as evidenced by the CFPB’s most recent annual Fair Debt Collection Practices Act (FDCPA) report (which incorporates information from the FTC’s annual letter to the CFPB describing its FDCPA activities), but this latest initiative is something of a new area of focus for the CFPB. Both the FTC and CFPB, along with other agencies, share enforcement responsibilities under the FDCPA. 

To date, this joint operation includes 5 cases filed by the FTC, two filed by the CFPB, as well as 3 cases brought by the U.S. Department of Justice and U.S. Postal Inspection Service. Additionally, the operation includes actions by authorities in the following states: Arizona, California, Colorado, Connecticut, Florida, Idaho, Illinois, Indiana, Massachusetts, New Mexico, North Carolina, North Dakota, New York, Ohio, South Carolina, and Washington.  

In its press release, the CFPB highlighted its partnership with the New York Attorney General in actions against several companies. The FTC has similarly partnered with the New York Attorney General’s Office to crack down on phantom debt collection in the past.