CFPB Announces $860,000 Settlement with Debt Collection Company for Alleged Deceptive Practices and CFPA Violations

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[author: Jackie Odum]

On April 6, 2021, the Consumer Financial Protection Bureau (CFPB) announced that it entered into a consent order with a third-party debt collection company and its former owner for alleged violations of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536 and Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et ​​seq.

The CFPB alleged that the company mailed deceptive notices to consumers in an attempt to collect debt.  According to the Bureau, the letters falsely represented that consumers would be sued or face further legal action upon failure to pay the debt amount on the notices.

The consent order requires the debt collection company and its former owner to pay $860,000 in redress, which is suspended in full due to inability to pay.  Additionally, the consent order permanently bans both parties from participating in, or assisting others, in debt collection activities.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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