Prominent debt collector faces new accusations of wrongdoing

It has been a good summer for debt collectors. Profits have tripled for two of the largest companies in the industry, according to a report from Bloomberg. One of those companies is Encore Capital Group Inc., which took in $66 million more in revenue than anticipated.

Behind the scenes, however, Encore is facing pressure from the Consumer Financial Protection Bureau (CFPB). The agency filed a lawsuit against Encore, alleging the company has routinely violated multiple consumer justice laws, as well as the terms of a 2015 legal agreement.

Alleged inappropriate debt collection practices

At the heart of the CFPB’s lawsuit against Encore (and its subsidiaries) are three key consumer justice laws: the Consumer Financial Protection Act, the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.

The CFPB claimed Encore violated all three laws in an earlier case, one that resulted in a 2015 consent order. As part of this consent order, Encore agreed to abide by certain rules. Now, the CFPB says Encore has not only violated the consent order, but continues to run afoul of these consumer justice laws.

The CFPB alleges Encore:

  • Filed 100 lawsuits, possibly more, against consumers even after the statute of limitations had expired
  • Did not provide consumers the legally mandated documentation to verify debts
  • Failed to respond (within the deadline) to hundreds of requests from consumers for account-level documentation
  • Did not disclose the potential for international-transaction fees when communicating with consumers

“It looks like the CFPB said Encore didn’t take the previous consent decree seriously, so now they’re bringing out the big stick,” an executive-in-residence with Ohio State told American Banker.

Justice for consumers

Leaders at big companies often believe they can throw their weight around and bully consumers – even if they ignore the law. Most regular, everyday people likely do not realize laws are potentially being violated by these enormous debt collection businesses.

But consumers have rights, and these rights should be protected. Debt collectors expect you to follow the rules. Isn’t it only fair that the same be expected of them?