The Consumer Financial Protection Bureau yesterday announced a settlement with a debt collector regarding alleged violations of the Fair Debt Collection Practices Act, which will require the collector to pay $236,800 in fines and restitution.
A copy of the consent order between the CFPB and Financial Credit Service, Inc., which was doing business as Asset Recovery Associates, can be accessed by clicking here.
The CFPB said it identified a number of violations of the FDCPA, including:
- threatening arrest, lawsuits, liens on consumers’ homes, and garnishment of consumers’ bank accounts or wages;
- representing that non-attorney employees were attorneys;
- representing that consumers’ credit reports would be negatively affected if the debts were not paid, even though the collector did not report to the credit bureaus
In agreeing to the settlement and the consent order, the collector neither admitted nor denied any of the allegations made by the CFPB.
Along with paying a fine of $200,000 and $36,800 in restitution to affected consumers, the collector also agreed it will not make any misrepresentations regarding actions it does not intend to take or lawsuits that will be filed, will not threaten consumers with arrest, file liens against consumers’ houses, garnish bank accounts or wages, or report negative information to credit bureaus, indicate that it employs attorneys for collection, and misrepresent that non-attorney employees are attorneys.
The collector is also required to develop and submit a compliance plan to the CFPB as well as a redress plan for making restitution to affected consumers.
