CFPB Fines Debt Collector $5 Million for Improper Debt Collection and Credit Furnishing Practices

The CFPB recently entered into a consent order with a debt collector to assess a $5 million civil penalty to settle charges that the debt collector engaged in unlawful debt collection and credit reporting practices in violations of the Consumer Financial Protection Act and the Fair Credit Reporting Act.

According to the allegations stated in the consent order, the CFPB found that the debt collector made more than 12 million improper in-person visits to consumers’ homes, places of employment, the homes of neighbors, as well as other public places in an attempt to collect debt.  These improper attempts included physically blocking consumers from leaving private properties, including their homes, and calling consumers’ places of employment, while knowing that such calls could jeopardize their employment.  Further, the debt collector allegedly disclosed or risked disclosing consumers’ delinquency to third parties and humiliated and harassed consumers by threatening consumers with jail.

Additionally, the debt collector allegedly furnished inaccurate and incomplete information about consumers regularly to national credit reporting agencies (CRAs).  According to the consent order, the debt collector received as many as 18,000 credit reporting disputes in a month.  In response to such disputes, the debt collector is required to investigate and update or correct consumer information.  However, the CFPB alleged that the debt collector had no written policies or procedures related to credit reporting, which resulted in the inaccuracies.

Under the terms of the consent order, the debt collector is restrained from making in-person visits to consumers’ home, neighbors’ homes, place of employment or any public place when attempting to collect debt.  The debt collector is also prohibited from placing telephone calls to consumers’ workplace.  Finally, the debt collector must correct inaccurate consumer information that has been furnished to CRAs, implement and maintain reasonable written policies and procedures regarding the accuracy and integrity of consumer information, and pay a $5 million civil money penalty.

The consent order is available here, and the CFPB’s press release is available here.