A California-based organization called the largest debt collector and debt buying group in the country was sued by the federal consumer financial protection agency Tuesday for violating the terms of a 2015 consent order that was issued after the organization was found to have violated federal consumer protections.
The Consumer Financial Protection Bureau (CFPB), which filed the lawsuit yesterday (and which issued the consent decree five years ago), said in a release that it is seeking injunctions against the firms, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and civil money penalties.
The bureau said Tuesday’s lawsuit was filed against four San Diego-based organizations: Encore Capital Group, Inc., and its subsidiaries, Midland Funding, LLC; Midland Credit Management, Inc.; and Asset Acceptance Capital Corp. The bureau called them collectively “the largest debt collector and debt buyer in the United States, with annual revenue exceeding $1 billion and annual net income exceeding $75 million.”
According to the bureau, Encore and its subsidiaries are already subject to a 2015 consent decree. That was based on the bureau’s previous findings that the groups violated the Consumer Financial Protection Act (CFPA), Fair Debt Collection Practices Act (FDCPA), and Fair Credit Reporting Act.
“The Bureau alleges that Encore and its subsidiaries have violated the terms of this consent order and again violated the FDCPA and CFPA,” CFPB said.
Specifically, the bureau charges that since September 2015, Encore and its subsidiaries violated the 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.
The CFPB also alleges that the companies violated the consent order, the CFPA, and the FDCPA by suing consumers to collect debts even though the statutes of limitations had run on those debts; and that they violated the consent order by attempting to collect on debts for which the statutes of limitations had run without providing required disclosures.
Further, the bureau claims, the companies violated the CFPA by failing to disclose possible international-transaction fees to consumers, thereby effectively denying consumers an opportunity to make informed choices of their preferred payment methods. Each violation of the consent order constitutes a violation of the CFPA, CFPB asserted.