Encore to Pay $15M to Settle CFPB Lawsuit

The Consumer Financial Protection Bureau today announced it has settled a lawsuit it filed last month against Encore Capital Group and its subsidiaries, Midland Funding, Midland Credit Management, and Asset Acceptance Capital Corp. The companies will repay consumers nearly $80,000 and pay a civil fine of $15 million.

A copy of the stipulated final judgment can be accessed by clicking here.

The CFPB accused the companies of violating the terms of a 2015 consent order by suing consumers without possessing required documentation, using law firms and an internal legal department to engage in collection efforts without providing required disclosures, and failing to provide consumers with required loan documentation after consumers requested it.

Under the terms of the settlement, the companies will be prohibited from using a payment processing company that processes consumers’ payments from another country without disclosing that those consumers may be subject to additional fees and that those fees can be avoided by using alternative payment options. As well, the terms of the 2015 Consent Order that Encore and its subsidiaries agreed to will be extended for another five years. This includes making sure it has the proper documentation before filing a lawsuit against a consumer, making sure it provides consumers information about their debts before engaging in any legal collections, collecting or trying to collect time-barred debt through legal collections, and making certain disclosures when collecting on time-barred debts. The disclosures will depend on whether the debt can be reported to a credit bureau or not.

One interesting component to the settlement was an entry that says the defendants “will have deemed to have complied with the disclosure requirements if they make a disclosure to consumers using the relevant language from a model form approved by the Bureau in any final rule issued by the Bureau under the FDCPA or a disclosure that is required by the laws and regulations of a specific jurisdiction; complies with those laws or regulations, and is substantially similar to the disclosure required by the settlement.

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