CFPB Addresses Debt Collection Mill Lawsuits

Consumers in Illinois and throughout the United States are routinely contacted by debt collectors attempting to recover money for various types of debts. In some cases, debt collectors are attempting to collect on legitimate debts, meaning debts that actually exist and which the consumer owes, and for which the statute of limitations has not run out. However, there are also debt collectors that try to collect on fraudulent debts, or that continue trying to collect on debts that have been discharged in bankruptcy, debts for which the statute of limitations has run, and debts that never belonged to that particular consumer in the first place. According to a recent news release from the Consumer Financial Protection Bureau (CFPB), the agency has reached a settlement with a “debt collection mill” that has been “bombarding consumers with junk lawsuits.”

What should you know about the CFPB news, and what implications could it have for debtors in the Oak Park area?

CFPB Sues for Illegal Debt Collection Practices

According to the CFPB news release, the CFPB filed a lawsuit against Forster & Garbus, LLP, which the news release describes as a “debt collection mill,” and recently settled. As the news release emphasizes, if the proposed settlement is approved, it would prohibit this alleged “debt collection mills” from “filing any new lawsuit against a consumer unless it has specific documents supporting the debt and certifies that an attorney reviewed those documents.” In addition, the proposed settlement, if approved, would require the debt collector to “dismiss any pending lawsuit where it cannot satisfy these requirements.” The settlement would also require the debt collector to pay a $100,000 penalty, which would go toward victim relief.

The CFPB lawsuit alleged that the debt collector “filed more than 99,000 debt-collection lawsuits” over a roughly three-year period, but had “documents to support only a fraction of those debts.” The lawsuit also alleged that the debt collector violated the Fair Debt Collection Practices Act (FDCPA) by attempting to collect debts from consumers through “false, deceptive, or misleading representations.”

Implications for Future Debt Collection Practices and Consumer Rights

Current CFPB Director Rohit Chopra explained that the debt collector “bombarded its customers with sketchy lawsuits on behalf of big lenders like Discover and Citibank.” While this particular case will only apply to consumers who were targeted by Forster & Garbus, or who were sued by this specific debt collector, the case could have broader implications. Indeed, as Chopra clarified, following the settlement of this lawsuit, the “CFPB will be scrutinizing large financial companies that enlist debt collection outfits operating lawsuit mills.”

You should know that you have rights under the FDCPA. Debt collectors cannot make threats to collect on debts, they cannot make false or deceptive representations to collect on debts, and they cannot contact you at certain times and through certain means once you ask them to stop. If you believe your rights were violated, you should get in touch with a consumer protection lawyer who may be able to assist you.

Contact Our Oak Park Consumer Protection Lawyers

Do you have questions about your rights as a debtor, or questions about debt and bankruptcy? One of our experienced Oak Park consumer protection attorneys can help. Contact the Emerson Law Firm today.



See Related Blog Posts:

How to Keep Your Property in a Consumer Bankruptcy Case

Top Benefits of Bankruptcy in 2023

Comments

Post a Comment

Popular posts from this blog

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti
Read more

Learning About Different Types of Wills

Whether you are young or old, single or married, wealthy or with limited financial means, healthy or dealing with a medical condition, it is important to make a will. Many people have incorrectly heard that wills are only necessary for particular people, such as those with a substantial amount of assets or for older adults in poor health. Yet wills are critical for adults of all ages, and an experienced Oak Park estate planning lawyer can help you to make one. Before you begin working with a lawyer on a will, you might start conducting your own research into wills in Illinois and the requirements for a valid will. In so doing, you are likely to come across information about many different types of wills, and you are probably going to wonder whether you will need more than one kind of will. In short, there are different terms that can be used to describe the form or function of a will, as well as some distinct types of wills. Our Oak Park estate planning attorneys can explain in more
Read more

Younger Parents Need an Estate Plan

It is critical for younger parents to have an estate plan, even if they know they are healthy and do not anticipate that anything will happen in the near future. Much too often, younger parents assume that they can wait until they are older to consider estate planning or until there is a health-related reason to begin the estate planning process. Yet estate planning is critically important for parents who have minor children. While estate planning is important for adults of all ages, it can allow parents to make important decisions about who will care for their children in the event that they become unable to do so themselves. Our Oak Park estate planning lawyers can explain in more detail. Naming a Guardian for Your Minor Children in Your Will Most importantly for younger parents, making a will allows you to name a guardian who can care for your child in the event of your unexpected death. Nobody anticipates a deadly accident or a sudden situation in which there is a need for another
Read more