Today, the Consumer Financial Protection Bureau (CFPB) announced enforcement actions against Encore Capital Group and Portfolio Recovery Associates, the two largest debt buyers active in the United States. According to the Bureau, Encore will pay up to $42 million in refunds to affected consumers, a $10 million fine and cease collection on $125 million in debts. Portfolio will pay $19 million in consumer refunds, a $8 million fine and cease collection on over $3 million in debts. The CFPB documented the companies buying debts that were potentially inaccurate, lacking documentation or unenforceable, filing lawsuits without verifying debts and using false statements to pressure consumers into making payments.
Lisa Stifler, Policy Counsel at the Center for Responsible Lending, gave the following statement:
The Portfolio Recovery Associates and Encore Capital Group consent orders underscore the questionable tactics used by even the largest debt buyers attempting to collect old debts – deception, intimidation, and the mass-production of lawsuits against the wrong people for the wrong amount of money. Today’s action by the CFPB confirms that debt buyers cannot abuse consumers, and that they must act responsibly when trying to collect.
It is absolutely urgent that the CFPB propose new rules that will stop all debt collectors from engaging in abusive behavior, prevent them from collecting debts based on inaccurate information, and punish them when they do lie to courts and consumers. States must also act to safeguard residents from frivolous lawsuits and ensure the integrity of their courts. Consumers deserve to be protected from wrongful collection and legal action, and today's announcement is a step in the right direction.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Andrew High at Andrew.High@responsiblelending.org or 919-313-8533.