On September 25, 2019, the CFPB filed a lawsuit in federal district court in Maryland against Maryland-based debt collector FCO Holding, Inc. (“FCO”), its various subsidiaries and Michael E. Sobota, the CEO, president, director, and owner of FCO. According to the lawsuit, FCO and Sobota operate the largest debt-collection company in the multi-unit housing industry, collecting debt on behalf of large apartment complexes, including student and military housing, and assisted-living facilities.

The CFPB claims FCO violated the Fair Credit Reporting Act, Consumer Financial Protection Act and Regulation V which implements the Fair Debt Collection Practices Act by, among other allegations, failing to adequately train employees in handling indirect disputes to consumer reporting agencies (CRAs); failing to adequately draft and maintain reasonable written policies and procedures regarding the furnishing of accurate and complete information to the CRAs and update as necessary; failing to properly review and investigate all relevant information submitted in indirect disputes; and furnishing information about accounts before or without investigating the accuracy of the information after receiving reports of identity theft from consumers. The CFPB further alleges FCO and Sobota violated the FDCPA by representing that consumers owed certain debts when, in fact, FCO had no reasonable basis to assert the consumers owed such debts.

The CFPB seeks injunctive relief, civil money penalties, and compensation for injured consumers, including refund of monies paid, restitution, and other civil damages.