Three entities were cited for violations of the California Consumer Financial Protection Law and fined.
06/06/2023 11:55 A.M.
2.5 minute read
The California Department of Financial Protection and Innovation (DFPI) has issued enforcement actions under the state’s debt collection licensing and consumer protection laws.
According to a news release, the DFPI’s enforcement actions focus on three entities conducting “unlicensed debt collection activity under the Debt Collection Licensing Act (DCLA) and unlawful, unfair, deceptive, or abusive acts or practices in violation of the California Consumer Financial Protection Law (CCFPL).”
The three entities that the DFPI issued actions against are Allen and Associates, Blackrock Legal Group and RM Legal.
“These actions are a robust continuation of the [d]epartment’s efforts to pursue unscrupulous debt collectors,” the DFPI reports.
Each entity is required to stop unlawful, unfair, deceptive, or abusive acts or practices, including:
- Engaging in debt collection in California without a license from the DFPI.
- Making unlawful threats to sue on debts.
- Making false claims about the alleged debt.
- Falsely presenting themselves as attorneys or someone in the legal profession or department.
- Making false claims of pending lawsuits or legal processes.
- Making false claims about the authority to collect a debt.
- Attempting to collect a time-barred debt without notifying the consumer that the debt is time-barred.
- Failing to provide a “validation notice” as required by federal law.
“The DFPI ordered the subjects to pay penalties totaling $85,000 and to desist and refrain from violating consumer protection laws,” according to the news release.
The DFPI reports it conducted debt collection enforcement sweeps in October 2022 and January 2023 and, since the DCLA passed in 2022, has issued 17 separate actions against debt collectors, with penalties totaling $347,500.
Last March, one year after implementing one of the most expansive consumer protection laws in the U.S., the DFPI announced it had collected close to $1 million in restitution for consumers, fielded hundreds of additional complaints related to the law, and launched more than 100 investigations using its expanded authority under the CCFPL, ACA International previously reported.
The DFPI also created several new divisions to expand oversight and outreach, including the Consumer Financial Protection Division, Office of Financial Technology Innovation, Office of the Ombudsman, and a targeted outreach team responsible for working with historically underserved communities that include veterans, senior citizens, students and immigrants.
It also created a Debt Collection Advisory Committee which, among other responsibilities, provides critical feedback to the DFPI on its debt collection licensing program. It also advises the DFPI on matters related to the debt collection business, including proposed fee schedules and other requirements.
This spring, ACA members were again appointed to the committee to serve a two-year term, and it held its first meeting in May, ACA previously reported.
For more information on state licensing requirements, members can review these related ACA SearchPoint documents:
- State Licensing Requirements Agency Relocation or Closure (PDF).
- State Licensing Requirements for Individual Collectors by Chart (PDF).
- Licensing and Collection Laws for Commercial Collectors (PDF).
- State Licensing Requirements for Managers (PDF).
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