EOS CCA, a Massachusetts-based collection agency, may have to pay $2.5 million in penalties and fines to settle a complaint of illegal debt collection activities filed by the Consumer Financial Protection Bureau.
The CFPB alleges that EOS reported and collected on cellphone debts that consumers disputed and were not verified by the agency. EOS also provided inaccurate information to credit bureaus about the debts and failed to correct information that it had determined was inaccurate.
EOS purchased $2.3 billion of defaulted cell phone debt from AT&T in 2012 for $35.4 million. Some of the debts were fraudulent, already paid, or settled, and EOS continued to collect on them anyway, according to the CFPB. EOS also reported all the debts as disputed even though it had no proof to substantiate those reports.
Under the terms of the complaint, EOS would repay $743,000 to consumers and pay $1.8 million in fines. As well, EOS would be required to cease collecting and reporting on disputed AT&T debt, stop collecting unverified debts, stop reselling debts, and ensure accuracy when providing information to credit reporting companies.
“After buying a portfolio of debt, EOS soon learned of several red flags that raised doubts about the debt’s validity. Even so, EOS still proceeded to collect certain disputed and unverified debts,” said CFPB Director Richard Cordray.
A copy of the complaint can be found here. A copy of the consent order can be found here.
