The CFPB has issued its annual Fair Debt Collection Practices Act report covering the CFPB’s and FTC’s activities in 2019.
With regard to the CFPB’s debt collection rulemaking, in her opening message, Director Kraninger only references the Bureau’s May 2019 proposal. She does not mention the Bureau’s supplemental proposal issued last month that would require debt collectors to make specified disclosures when collecting time-barred debts. With regard to the May 2019 proposal, Director Kraninger states that “[t]he Bureau intends to issue a final debt collections rule in 2020.” (The supplemental proposal is mentioned in the section of the report that describes the Bureau’s rulemaking but gives no timetable for a final rule.)
- According to the report’s section on complaints, the CFPB handled approximately 75,200 debt collection complaints in 2019 (which was 6,300 (approximately 8%) less than in 2018). As in 2018, the most common complaint was about attempts to collect a debt that the consumer claimed was not owed (but with more such complaints involving identity theft than in 2018). The second and third most common complaint issues were, respectively, written notifications about the debt, and taking or threatening a negative or legal action.
- In 2019, the CFPB announced three FDCPA enforcement actions. One of those actions resulted in a consent order and the other two actions are still pending. One pending action was filed in September 2019 against a debt collection company and its owner for alleged FDCPA violations in connection with the handling of direct and indirect disputes. The other pending action was filed in May 2019 against a debt collection law firm for alleged FDCPA violations based on an alleged lack of “meaningful attorney involvement.” In addition to the action that resulted in a consent order, the report states that in 2019, the Bureau resolved an FDCPA lawsuit filed in 2016 and obtained settlements with three defendants in a lawsuit filed in 2015 that is still pending. The Bureau reports that these matters resulted in judgments for nearly $50 million in consumer redress and $11.2 million in civil money penalties. The Bureau also permanently banned eight individuals from working in the debt collection industry. The Bureau states that, in addition to its three pending enforcement actions, it “is conducting a number of non-public investigations of companies to determine whether they engaged in collection practices that violate the FDCPA or CFPA.”
The CFPB’s report incorporates information from the FTC’s most recent annual letter to the CFPB describing its FDCPA activities. In 2019, the FTC brought or resolved law enforcement actions against 25 defendants, obtained more than $24.7 million in judgments, and permanently banned 23 companies and individuals from working in the debt collection industry. Three of the enforcement actions resolved in 2019 (including one that was filed in 2019) involved “phantom debt collection.” In addition to the actions involving “phantom debt collection,” the report describes two other FTC debt collection cases. One of these cases involved a debt collection business that allegedly falsely threatened to have people arrested if their debts were not paid. The case was settled in 2018 and refund checks totaling more than $516,000 were sent to consumers in 2019. Litigation remained ongoing in 2019 in the other case, which was filed jointly in 2018 with the New York Attorney General and involves alleged demands by the defendants for more money than consumers owed.