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CFPB Takes Action Against Debt Collection Law Firm, Buyer
On Monday, April 25, 2016, the CFPB entered into a consent order with a debt collection law firm Pressler & Pressler LLP and debt buying firm New Century Financial Services, Inc. The Bureau alleges the firm engaged in violations of the Fair Debt Collection Practices Act and the ban on unfair, deceptive or abusive acts and practices when it “filed hundreds of thousands of lawsuits against consumers” using automated processes with only cursory examinations of the underlying debt-related documentation. The CFPB also alleges the law firm failed to verify the validity or accuracy of the debts it attempted to collect even in instances where consumers filed a dispute. Similar allegations were made against the debt buyer. Pressler & Pressler and New Century Financial Services have agreed to stop filing or threatening to file collection lawsuits unless they obtain and review account-level documentation substantiating the debt. They also agreed to execute affidavits based on personal knowledge of the debt or the associated documentation. Lastly, the law firm will pay a $1 million civil money penalty and the New Century will pay a $1.5 million penalty.