Debt collector faces action for failure to establish policies, conduct reviews of disputes

Failing to establish or implement reasonable written policies and procedures of the accuracy and integrity of information a debt collection enterprise and its owner furnished to credit reporting agencies has earned an action taken against the firm by the federal consumer financial protection agency.

The Consumer Financial Protection Bureau (CFPB) also alleged that the firm’s failure to conduct reasonable investigations of indirect consumer disputes resulted in inaccurate information remaining on consumers’ credit reports.

In a release, the CFPB said it has filed a proposed settlement to resolve a lawsuit against the firm Fair Collections & Outsourcing (FCO), a non-bank debt collector based in Maryland. The bureau also alleges that the firm and its owner Michael Sobota, in addition to the failure to implement proper policies and procedures and to conduct reasonable investigations of disputes (including disputes related to identity theft), violated federal law when FCO represented that consumers owed certain debts when, in fact, FCO did not have a reasonable basis to assert that the consumers owed those debts.

The bureau said that, If the settlement is entered by the court, it would require FCO and Sobota to put in place reasonable policies and procedures to prevent future violations and pay a $850,000 civil money penalty.

CFPB Takes Action Against Debt Collector for Failing to Investigate Reports of Identity Theft and Misrepresenting Consumers’ Debts