CFPB Orders Medical Debt Collection Law Firms to Refund $577,135 to Consumers

On January 9, the CFPB entered into a Consent Order and Stipulation against two medical debt-collection law firms and their president for alleged violations of the FDCPA and FCRA. Based on these allegations, the CFPB ordered the Respondents to provide $577,135 in relief to affected consumers, correct their business practices, and pay a $78,800 civil money penalty. According to the allegations set forth in the consent order, between January 2012 and August 2016, debt collectors working for the firms violated the FDCPA by giving the false impression that the firm’s “Demand Letters were from an attorney or that the firm’s attorneys were meaningfully involved in reviewing the consumer’s case or had reached a professional judgment that sending a Demand Letter or making a collection call was warranted.” The Bureau also found that the firms notarized consumer affidavits for use in debt-collection lawsuits without properly verifying the truth of the signature. The CFPB also alleged that the firms violated FCRA’s Regulation V by failing to establish, implement, and periodically review and update reasonable written policies and procedures regarding the accuracy and integrity of consumer information furnished to consumer reporting agencies.

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CFPB Releases Report on Student Debt Incurred by “Older Consumers”

On January 5, the CFPB announced the release of a report, entitled Snapshot of Older Consumers and Student Loan Debt, which examines the “increasing student loan debt that older consumers are carrying, as well as how the increased debt burden is impacting borrowers’ later life financial security.” Among other things, the Report notes that the number of older student loan borrowers has quadrupled over the last decade, and that the amount of debt per older borrower has roughly doubled over that same time period, particularly as many borrowers take out loans for children or grandchildren. The Report notes further that, in 2015, nearly 40 percent of federal student loan borrowers age 65 and older were in default.

The Report also examines complaints from older consumers with private and federal student loans and highlights common problems that appear to arise, including, among other things, co-signing private student loans and difficulties accessing protections guaranteed under federal law for many federal student loan borrowers.

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CFPB Monthly Complaint Snapshot Spotlights Debt Settlement, Check Cashing, and Other Financial Services Complaints

On November 29, the CFPB released Volume 17 of its monthly complaint snapshot reports on consumer complaints stemming from financial services that fall outside of the Bureau’s major complaint categories. The “other financial services” covered in the report include debt settlement, check cashing, money orders, and credit repair. To date, the CFPB has handled approximately 1,035,200 complaints nationally across all products. As reported in the current snapshot: (i) Debt collection was the most-complained-about financial product or service in October; (ii) Student loan complaints showed the greatest increase—108 percent—of any product or service over the three-month period of August to October; and (iii) Alaska, New Mexico, and Missouri experienced the greatest year-to-year complaint volume increases from August to October 2016 period versus the same time period 12 months before. The current report also highlighted a trend in complaints coming from Oklahoma and the Oklahoma City metro area.

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CFPB and New York Attorney General File Lawsuit Against Network of Collections Companies

On November 2, the CFPB, in partnership with the New York Attorney General, filed a lawsuit in a federal district court against the leaders of a debt collection operation based out of Buffalo. The lawsuit alleges that defendants operate a network of companies that harass and/or deceive consumers into paying inflated debts or amounts they may not owe. The Bureau is seeking to shut down the operation and to obtain compensation for victims and a civil penalty against the companies and partners.

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CFPB Releases Supervisory Highlights Report for Fall 2016

On October 31, the CFPB released the 13th Edition of its Supervisory Highlights Report, covering the period May through August of this year. The report shares recent supervisory observations in the areas of automobile loan origination, automobile loan servicing, debt collection, mortgage origination, mortgage servicing, student loan servicing, and fair lending. The report found that the CFPB’s recent supervisory actions returned more than $11 million to approximately 225,000 consumers. The Bureau also set forth new examination procedures for reverse mortgage servicing, student loan servicing, and the Military Lending Act.

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