BCFP Fines Retailer $200k For Not Forwarding Payments on Sold Debts Fast Enough

The Bureau of Consumer Financial Protection has entered into a consent order with Bluestem Brands, Inc.; Bluestem Enterprises, Inc.; and Bluestem Sales, Inc., which collectively operate the Fingerhut and Gettington.com brands, for not forwarding payments made by individuals on delinquent accounts fast enough to the entities that purchased those debts.

Bluestem will pay a penalty of $200,000 and has been ordered to improve its policies and procedures on a number of fronts, including notifying individuals when their debt has been sold, no longer accepting payments by phone or online from individuals whose accounts have been sold, and forwarding payments sent to Bluestem by individuals to the owners of the debt in a more timely fashion.

There were about 18,000 payments made to Bluestem — totaling more than $1 million — that it waited more than 31 days to forward to the subsequent owners of the debts, and there were 3,500 instances where the delay was more than a year before the payment was forwarded. By not forwarding the payments in a timely fashion, Bluestem may have subjected those individuals to collection activities when a payment had been made or the debt had been paid in full. Bluestem may have also caused some debt buyers to furnish inaccurate information to a credit reporting agency as a result of the delayed payments.

A copy of the consent order can be accessed by clicking here.

The companies were deemed to have violated Section 1036(a)(1)(B) of the Consumer Financial Protection Act, which prohibits the use of unfair, deceptive, or abusive acts or practices.

Bluestem cited technical issues in a conversion of its accounts receivable system as the reason why the payments were not forwarded on a timely basis to the rightful owners of the debt.

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