CFPB Denies Petition From Debt Buyer to Amend CID

The Acting Director of the Consumer Financial Protection Bureau has denied a petition from a debt buying company to set aside or amend a Civil Investigative Demand that was alleged by the company to be overly broad, rejecting all of the company’s arguments.

A copy of the petition filed by Debt Management Partners (DMP) can be accessed by clicking here. A copy of the ruling from CFPB Acting Director Dave Uejio can be accessed by clicking here.

DMP received the CID from the CFPB in May. It sought to determine whether debt buyers or collectors had, in connection with selling or collecting debt:

  • (1) made false or misleading representations to consumers or third parties in a manner that is unfair, deceptive, or abusive in violation of §§ 1031 and 1036 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536;
  • (2) knowingly or recklessly provided substantial assistance in such violations, also in violation of §§ 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531, 5536; or
  • (3) made prohibited communications or false or misleading representations to consumers or third parties in a manner that violates the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692b, 1692c, 1692e.

DMP sought to have the petition set aside or amended because it failed to sufficiently identify the nature of the conduct under investigation, because it was overly broad, and because complying with the CID would be unduly burdensome. Uejio rejected all three arguments in his ruling.

DMP argued that it was required to be informed about how it was involved in any potential violations and why it was being investigated, but Uejio’s ruling said the CID was specific enough by indicating that it was looking for information related to “potentially false and misleading communications to consumers made in connection with selling and collecting debt.”

With regard to the claim that complying with the CID would be unduly burdensome, Uejio said that the company did not do enough to illustrate why that would be the case. “… DMP has not asserted — much less provided evidence showing — that responding to the CID would ‘threaten[] to unduly disrupt or seriously hinder normal operations,’ ” Uejio wrote.

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