Debt collection firm hit with $204k money penalty over abusive, deceptive practices

A $204,000 civil money penalty was assessed Tuesday against RAB Performance Recoveries, LLC, in a consent order with the Consumer Financial Protection Bureau (CFPB), which said the firm threatened to sue and sued consumers for debts it had no legally required license to pursue.

The CFPB said that through 2012, RAB, a New Jersey company, purchased and collected consumer debts from debt brokers and through August 2014 used collections law firms to obtain judgments against consumers. RAB has continued to collect on those judgments against consumers as well as on a handful of payment agreements it obtained from debtors, the agency said.

During the period that RAB was obtaining judgments against consumers, RAB threatened to sue, sued, and demanded payment from consumers in Connecticut, New Jersey, and Rhode Island even though RAB did not hold the licenses that those states required to sue to collect debts, the bureau said. The agency said that RAB misrepresented that it had a legally enforceable right to recover payments from consumers in these states through the judicial process in violation of the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act of 2010 (CFPA).

The consent order:

  • prohibits RAB from collecting on the judgments against, or payment agreements from, consumers it obtained in Connecticut, New Jersey, and Rhode Island when RAB did not hold a required debt-collection license in those states;
  • requires RAB to take all necessary steps to vacate those judgments and suspend collection of those judgments and to notify consumers with payment agreements that they have been satisfied; and
  • requires RAB to pay a $204,000 civil money penalty.

Consumer Financial Protection Bureau Settles with Debt Collector for Engaging in Deceptive Debt Collection Practices in Three States