California DFPI Fines Collector, Debt Buyer $375k

The California Department of Financial Protection and Innovation has issued its first enforcement action against a debt buyer and debt collector, fining a firm $375,000 for allegedly breaking state and federal law by unlawfully threatening to sue consumers and submitting negative information to credit bureaus without notifying consumers.

A copy of the enforcement action, against F&F Management, can be accessed by clicking here.

Along with the fine, the company is required to desist and refrain from unlawful acts or practices associated with the Fair Debt Collection Practices Act, the Rosenthal Fair Debt Collection Practices Act, and the Consumer Credit Reporting Agencies Act.

Among the allegations made against the company were: leaving voicemails that failed to disclose the caller ID, threatening illegal lawsuits and wage garnishment, and failing to notify consumers in writing within 30 days of transmitting negative information to a credit reporting agency.

The text of the pre-recorded voicemails that were left on “multiple” consumers’ phones was:

This is the last and final notice for you. This legal proceedings (sic) issued on your docket number with our company to notify you that after making calls to you onto your phone number we were not able to get a hold of you. So the legal department has decided to mark this case as a flat refusal to pay and take legal action against you. We have sent you this warning notification about legal proceedings but you failed to respond on time. If you fail to respond in the next 24 hours we will register this case in court. Consider this as a final warning. And we will be emailing and faxing this issue to your current employers to make sure they take strict action against you. Your salary wages will be garnished. Contact us today to make a payment arrangement or we will be proceeding legally against you. The opportunity to take care of this voluntarily is coming to an end. We would hate for you to lose the option of resolving this before it goes to the next step, which is a lawsuit against you, but to do so you must take immediate action. Please let us know what your intention is by today so we can hold the case or else we will submit the paperwork to your local county sheriff department and you will be served a court summons at your doorstep. Our number is 888-881-4241 or press 1 to speak with an agent now.

In some cases, the voicemail was not the “last and final” notice because consumers received the voicemail more than once. The collector also never initiated any legal proceedings against consumers.

The company also failed to provide any written notification required under the FDCPA after making an initial communication to a consumer about a debt.

Consumers complained to the state that their credit scores dropped by as much as 60 points after F&F began reporting debts without first notifying consumers.

“The DFPI will not tolerate any unlawful, unfair, deceptive or abusive acts or practices in collecting debts,” said DFPI Senior Deputy Commissioner of the Consumer Financial Protection Division Suzanne Martindale, in a statement. “Debt collection is one of the DFPI’s top complaint types. This action highlights just some of the unlawful and unfair acts that can cause enormous harm to consumers and plague the debt collection industry, and the ways the DFPI can address them.” 

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