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Debt-settlement company to pay $236,000 for violations
The CFPB Wednesday settled a lawsuit with Asset Recovery Associates, Inc. (ARA), a debt-collection company, for violating the Fair Debt Collection Practices Act. The company will pay at least $36,000 in restitution to affected consumers and a $200,000 civil money penalty.
The company's violations of the Fair Debt Collection Practices Act included:
- threatening consumers with arrest, lawsuits, liens on consumer's homes, and garnishment of consumers' bank accounts or wages;
- representing that non-attorney company employees are attorneys; and
- representing that consumers' credit reports will be negatively affected if they do not pay.
The bureau also found that these actions were "deceptive," and in violation of the Consumer Financial Protection Act of 2010. Under the settlement ARA must record calls to consumers to help ensure collectors do not continue to make false statements.
NAFCU has various resources on debt collection available here. Earlier this month, the bureau extended the comment period on its rulemaking related to third-party debt collection by 30 days to Sept. 18 - more information is available through NAFCU's Regulatory Alert.