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

On Behalf of | Aug 25, 2021 | Firm News

The Consumer Financial Protection Bureau (CFPB) has resolved a lawsuit against a debt collection enterprise and its owner. Bureau of Consumer Financial Protection v. Fair Collection & Outsourcing, Inc., D.C. Maryland No. 8:19-cv-02817.  The CFPB alleged that the debt collector violated federal law by (1) failing to establish or implement reasonable written policies and procedures regarding the accuracy and integrity of the information it furnished to credit reporting agencies; (2) failing to conduct reasonable investigations of indirect consumer disputes, resulting in inaccurate information remaining on consumers’ credit reports; and (3) representing that consumers owed certain debts when, in fact, it did not have a reasonable basis to assert that the consumers owed those debts.  Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions and persons that violate federal consumer financial laws.

“As we recover from the economic devastation caused by COVID-19, credit reports play a huge role in consumers’ financial lives. Inaccurate information, such as information related to tenant debt, can be devastating for someone who’s applying for a loan, seeking a new place to live, or trying to get a new job,” said CFPB Acting Director Dave Uejio. “We will not tolerate companies that put inaccurate data on consumers’ credit reports or fail to investigate consumers’ disputes.”

Lenders and debt collectors must be sure to implement reasonable policies and procedures in connection with (1) furnishing information to credit bureaus; (2) reviewing and properly treating identity theft reports from consumers; and (3) examining the quality, completeness, accuracy, and integrity of consumer account information before commencing collection activities.  DeBlasis Law Firm can help.