Consumer Financial Protection Bureau Settles Lawsuit With Debt Collectors And Debt Buyers Encore Capital Group, Midland Funding, Midland Credit Management, And Asset Acceptance Capital Corp.

October 15, 2020

Consumer Financial Protection Bureau Settles Lawsuit With Debt Collectors And Debt Buyers Encore Capital Group, Midland Funding, Midland Credit Management, And Asset Acceptance Capital Corp.

On Thursday, October 15, 2020, the CFPB issued a press release regarding a filing for a proposed stipulated final judgment and order to settle its lawsuit against Encore Capital Group, Inc., and its subsidiaries. This is an extension of the lawsuit the Bureau filed against Encore last month which we reported on. The Bureau alleged Encore, the largest debt collection firm in the country, violated the terms of its 2015 consent order arising from their failure to provide certain disclosures and documents to customers. This follows the trend at the Kraninger-led Bureau of closely watching and enforcing actions against debt collectors, where these disclosures and documents are of chief importance.

 

Two most interesting things out of this lawsuit:

  1. $15 million Civil Money Penalty is fairly large given the Bureau only assessed $80K of customer redress.
  2. Earlier this month, the Bureau set out a proposal to allow firms to end the terms of their consent order before the 5 year term expires if they meet certain qualifications. As this issue arises out of a consent order Encore failed to follow-through on, the timing is a bit odd for each.