Among other things, the report indicates that the non-public supervisory actions and self-reported violations at banks and nonbanks during the period in question resulted in $11.6 million in remediation to more than 80,000 consumers.
Yesterday, the CFPB announced an enforcement action against a medical debt collection company for mishandling consumer credit reporting disputes and preventing consumers from exercising important debt collection rights. The company is ordered to provide over $5.4 million in relief to harmed consumers, and pay a $500,000 penalty. At the core is a lack of adequate policies and procedures.
These collectors operate outside the purview of the CFPB and with the full authority of those government agencies. These collectors frequently charge exorbitant fees and often hold the ability to effect wage garnishments, arrest, and even foreclosure against consumers. The consumers most vulnerable economically, are often caught in this cycle compounding the possibility of mistreatment.
The New York Times reported yesterday that EBay has revised its user agreement (which will take effect June 15) to include a statement that has raised concerns among state regulators. “You consent to receive autodialed or prerecorded calls and text messages from eBay at any telephone number that you have provided us or that we have otherwise obtained.”
Earlier this week, Pennsylvania Attorney General Kathleen G. Kane announced that her office filed a civil complaint against James Havassy and his firm, Hamilton Law Group, P.C., a medical debt collection company. According to the announcement, Havassy is accused of using the state statute commonly known as Relative’s Liability Procedure to coerce payments from debtors’ relatives, who were not responsible for the debt.
Oral arguments on the Defendant’s Motion to Dismiss the CFPB action against the Georgia law firm Frederick J Hanna & Associates P.C. were held on June 3rd. The stakes are high, not only for the Hanna law firm, but also any law firm that handles a high volume of consumer debt collection matters. The case should be front and center for all law firms practicing in this space.
Two years ago, in Simon v. FIA Card Services, N.A., the Third Circuit held that alleged violations of the FDCPA resulting from conduct in a bankruptcy case were not precluded by the Bankruptcy Code. Now on remand, the district court has granted the defendants’ motions for summary judgment, holding that the alleged irregularities with the subpoena were immaterial and would not mislead a competent attorney regarding a consumer’s rights.
Some questions had definite answers from panelists; however, many of the questions highlighted confusion within the laws and regulations themselves. While the FTC requires one thing, the CFPB may require something entirely different — and often contradictory. And because there is little cohesion among state laws, compliance suffers across the board. Still, even recognizing the areas of confusion can help an agency in their compliance plan. Better still, though, would be some kind of definitive answer.
Quietly, on the eve of the holiday weekend, the CFPB published a Rulemaking Agenda update, extending the end of Prerule Activities for Debt Collection, for a second time, to December of this year.
The Primary Group is alleged to have sent consumers multiple text messages, and, in most cases, failing to disclose the company as a debt collector. Per Jessica Rich, Director of the FTC’s Bureau of Consumer Protection: “[Debt collectors] can’t harass or lie to you, whether they send a text, email, or call you.” She also stated that “legitimate debt collectors know the rules.”