Just in case there was a doubt about what the consumer bar is really after, a prolific attorney that targets the ARM industry argues that the CFPB is “ineffective” in its regulatory efforts because it doesn’t get enough money from collection agencies and debt buyers to settle consumer complaints.

Sergei Lemberg just released a whitepaper under a press release headline of “CFPB Ineffective in Obtaining Financial Relief for Victims of Debt Collection Violations.” The whitepaper argues that rights of private action under the FDCPA are far more effective than the stuffy old CFPB…at extorting money from debt collection agencies, of course.

To Lemberg and his peers, money = justice. If they can get a collection agency to pay a consumer $3,500 in a settlement (and, naturally, several times that amount to the lawyers for their trouble), then everything will be better. What is not mentioned is that settlements under rights of private action almost always see the defendant admit no wrongdoing and make no promise to change practices.

This point is nearly conceded as Lemberg notes, “When debt collection agencies know they’re in violation, they don’t want to incur the expense of litigation, so they offer to settle in the pre-litigation phase.”

The whitepaper argues that the fact that only two percent of the debt collection complaints the CFPB forwarded to companies last year resulted in monetary relief proves that private FDCPA suits are more effective. Because it’s all about the money.

Equating a complaint to a definite “violation,” the report ignores the fact that the CFPB addresses each complaint it receives individually, determining the exact issue. To a consumer attorney, the thought of reasonable resolution without money exchanging hands is foreign and probably terrifying.

When the CFPB does take action against an ARM company, a change in practices is paramount in any settlement agreement. Often, the CFPB will have a company revise its practices without litigation, using its supervisory authority.

That’s all secondary to Lemberg, though. All that matters is money.


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