CFPB Issues Annual FDCPA Report

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The CFPB has issued its annual Fair Debt Collection Practices Act report covering the CFPB’s and FTC’s activities in 2020.  Debt collectors should expect increased scrutiny from the CFPB in 2021, with both Acting Director Uejio and Director-nominee Rohit Chopra having identified unlawful debt collection practices as a CFPB priority target.

In addition to a description of the FDCPA-related findings from the Bureau’s Summer 2020 Supervisory Highlights and Special Edition of Supervisory Highlights on COVID-19 Prioritized Assessments, the report includes the following information:

  • According to the report’s section on complaints, the CFPB received approximately 82,700 debt collection complaints in 2020 (which was 7,500 (approximately 10%) more than in 2019).  As in 2019 (and all prior years since the Bureau began accepting debt collection complaints in 2013), the most common complaint was about attempts to collect a debt that the consumer claimed was not owed (with more such complaints involving identity theft than in 2019).  The second and third most common complaint issues were, respectively, written notifications about the debt, and taking or threatening a negative or legal action.
  • In 2020, the CFPB announced four new FDCPA enforcement actions.  Two of those actions resulted in consent orders and the other two actions are still pending.  The pending actions consist of :
    • An action filed in September 2020 by the CFPB and New York Attorney General against five debt collection companies and four individuals who own and manage the companies in which the complaint alleges the defendants used deceptive, harassing, and otherwise improper methods to induce consumers to make payments to them in violation of the FDCPA and CFPA.
    • An action filed in December 2020 in which the complaint alleges that the defendant. violated the FDCPA and CFPA in connection with its operation of bad-check pretrial-diversion programs on behalf of more than 90 district attorneys’ offices throughout the United States.  Such programs require the writer of a dishonored check to pay the debt and also enroll in, pay for, and complete a financial education course.
  • The actions that resulted in consent orders consist of:
    • A lawsuit filed in September 2020 in which the complaint alleged that the defendants engaged in various unlawful practices in violation of the FDCPA, the CFPA, and a 2015 administrative consent order between the defendants and the CFPB.  Among the practices that the Bureau alleged the defendants engaged in that violated the consent order was suing consumers without possessing documentation as required by the consent order, using law firms and an internal legal department to engage in collection efforts without providing disclosures required by the consent order, failing to provide consumers with loan documentation upon request as required by the consent order, and attempting to collect on debts for which the applicable statute of limitations had run without providing disclosures required by the consent order.  The consent order requires the defendants to pay $79,308.81 in consumer redress and a $15 million civil money penalty.
    • The resolution of an FDCPA investigation of a New Jersey debt buyer that was found by the Bureau to have threatened and sued consumers to collect debts in states where it did not have a legally required license. The Bureau concluded that the debt buyer had falsely implied that it had a legally enforceable claim for payment and threatened to take action that could not legally be taken by threatening litigation in the demand letters and filing debt-collection lawsuits without the required licenses in violation of the FDCPA and CFPA.  The consent order requires the debt buyer to pay a civil money penalty of $204,000.

The Bureau states in the report that, in addition to its pending enforcement actions, it “is conducting a number of non-public investigations of companies to determine whether they engaged in collection practices that violate the FDCPA or CFPA.”

The CFPB’s report incorporates information from the FTC’s most recent annual letter to the CFPB describing its FDCPA 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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