$79 Million in Fines for Bad Debt Collecting

The two largest debt buyers in the country recently faced massive fines for bad debt collecting practices. According to The Consumer Financial Protection Bureau, Encore Capital Group and Recovery Associates attempted to collect debt that was unsubstantiated or inaccurate. In addition, the companies also filed lawsuits against consumers without having the necessary documentation to prove their claims. For these allegations, Encore and Recovery Associates were hit with a $79M penalty.

According to the CFPB, these two companies threatened and deceived consumers in order to collect on debts that the companies should have known were inaccurate. The companies were ordered to refund millions of dollars to consumers, to stop collecting on debts that cannot be verified, and to stop reselling debt. If a debt is legally uncollectable, the companies have been banned from filing a lawsuit against the consumer, or even threatening to do so. This will mean a major overhaul of company practices for both firms.

It’s no surprise that the CFPB is able to identify shady business practices in debt collecting firms. These types of businesses often attempt to collect unverified debt, and often use objectionable methods to get consumers to pay. Or, as the firms above faced prosecution for, debt collection companies often file numerous bad lawsuits without doing the proper research first. If you or someone you know is facing a debt collection lawsuit from a creditor, it is imperative that you contact an attorney right away. There is a small window of time in which to act in these situations. With the help of an experienced lawyer, you may be able to have your case dismissed almost immediately. If you live in Texas, in the Fort Worth or San Antonio areas, contact Kerry H. Collins and Associates, P.C.

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