CFPB and Encore Capital Group Settle FDCPA Suit

Encore Capital Group says the settlement resolves 2015 consent order and it has fully corrected the issues.

10/19/2020 9:00 AM

AdvocacyNewsCFPB
CFPB and Encore Capital Group Settle FDCPA Suit

The Consumer Financial Protection Bureau, Encore Capital Group Inc. and its subsidiaries, Midland Funding LLC, Midland Credit Management Inc. and Asset Acceptance Capital Corp., have reached a settlement in a Fair Debt Collection Practices Act, Fair Credit Reporting Act and Consumer Financial Protection Act (CFPA) lawsuit and 2015 consent order.

The CFPB filed a proposed stipulated final judgment and order to settle its lawsuit on Oct. 16.

Encore and its subsidiaries were subject to a 2015 consent order with the bureau based on its previous findings that the companies violated the CFPA, FDCPA and FCRA, ACA International previously reported. The bureau alleged that Encore and its subsidiaries violated the terms of the consent order and again violated the FDCPA and CFPA. The bureau, in a Sept. 8 complaint, sought injunctions against the companies, as well as damages, redress to consumers, disgorgement of ill-gotten gains and civil money penalties.

If entered by the court, the stipulated final judgment and order will require Encore and its subsidiaries to pay $79,308 in total redress to consumers and a $15 million civil money penalty, according to a news release from the CFPB. The settlement will also require Encore and its subsidiaries to make various material disclosures to consumers, refrain from the collection of out-of-statue debt absent certain disclosures to consumers, and abide by certain conduct provisions in the 2015 consent order for five more years, according to the news release.

In response to the settlement, Encore Capital Group issued the following statement:

The principal focus of the suit’s allegations was that Encore’s implementation of certain practices required under a 2015 consent order was not perfect, although the company addressed those minor gaps years ago. Today’s settlement includes a one-time payment to the CFPB and three narrow conduct provisions that have no incremental operational impact. This agreement will end the 2015 consent order and Encore has no further open issues with the CFPB.

“While we’re disappointed the CFPB chose to file suit on these outdated issues, we decided to accelerate our conversations with the bureau so we could reach an agreement and move forward constructively,” said Greg Call, the company’s executive vice president, general counsel, and chief administrative officer. “We wanted to resolve this suit quickly because we believe it didn’t accurately reflect our strong commitment to helping our consumers on their paths to economic recovery and our desire to maintain a cooperative relationship with the CFPB.”

Under the settlement, the company will take a one-time charge of $15 million in the third quarter of 2020. It has also agreed to pay a total of approximately $9 thousand in redress to 14 identified consumers. In none of the consumer cases does the CFPB dispute that the underlying debt is valid. In terms of the three conduct provisions, all relate to already-implemented practices and do not have any incremental operational impact. Encore maintains it acted in accordance with all relevant laws.

“We fully corrected the issues underlying the allegations in this suit years ago, and we have total confidence in our systems, practices and approaches to working with consumers,” said Ashish Masih, Encore’s president and CEO.

According to the statement, Encore’s efforts to implement the CFPB’s requirements under the 2015 consent order were thorough and effective except for a very small number of instances. In response, Encore quickly worked to refine its processes and make necessary adjustments to improve its operations, according to the company’s statement. The company also provided appropriate relief for impacted accounts more than three years ago.

Concluding Encore’s statement, Call said, “We’ve long believed that the rulemaking process is the most appropriate method for establishing industry standards. We also believe the forthcoming rules, expected to be issued this month, will be largely consistent with practices we’ve had in place for years, which should strengthen our competitive position in the marketplace by ensuring that all companies, large and small, are held to the same high standards we abide by every day.”


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

CFPB and Encore Capital Group Settle FDCPA Suit

The Consumer Financial Protection Bureau, Encore Capital Group Inc. and its subsidiaries, Midland Funding LLC, Midland Credit Management Inc. and Asset Acceptance Capital Corp., have reached a settlement in a Fair Debt Collection Practices Act, Fair Credit Reporting Act and Consumer Financial Protection Act (CFPA) lawsuit and 2015 consent order.

The CFPB filed a proposed stipulated final judgment and order to settle its lawsuit on Oct. 16.

Encore and its subsidiaries were subject to a 2015 consent order with the bureau based on its previous findings that the companies violated the CFPA, FDCPA and FCRA, ACA International previously reported. The bureau alleged that Encore and its subsidiaries violated the terms of the consent order and again violated the FDCPA and CFPA. The bureau, in a Sept. 8 complaint, sought injunctions against the companies, as well as damages, redress to consumers, disgorgement of ill-gotten gains and civil money penalties.

If entered by the court, the stipulated final judgment and order will require Encore and its subsidiaries to pay $79,308 in total redress to consumers and a $15 million civil money penalty, according to a news release from the CFPB. The settlement will also require Encore and its subsidiaries to make various material disclosures to consumers, refrain from the collection of out-of-statue debt absent certain disclosures to consumers, and abide by certain conduct provisions in the 2015 consent order for five more years, according to the news release.

In response to the settlement, Encore Capital Group issued the following statement:

The principal focus of the suit’s allegations was that Encore’s implementation of certain practices required under a 2015 consent order was not perfect, although the company addressed those minor gaps years ago. Today’s settlement includes a one-time payment to the CFPB and three narrow conduct provisions that have no incremental operational impact. This agreement will end the 2015 consent order and Encore has no further open issues with the CFPB.

“While we’re disappointed the CFPB chose to file suit on these outdated issues, we decided to accelerate our conversations with the bureau so we could reach an agreement and move forward constructively,” said Greg Call, the company’s executive vice president, general counsel, and chief administrative officer. “We wanted to resolve this suit quickly because we believe it didn’t accurately reflect our strong commitment to helping our consumers on their paths to economic recovery and our desire to maintain a cooperative relationship with the CFPB.”

Under the settlement, the company will take a one-time charge of $15 million in the third quarter of 2020. It has also agreed to pay a total of approximately $9 thousand in redress to 14 identified consumers. In none of the consumer cases does the CFPB dispute that the underlying debt is valid. In terms of the three conduct provisions, all relate to already-implemented practices and do not have any incremental operational impact. Encore maintains it acted in accordance with all relevant laws.

“We fully corrected the issues underlying the allegations in this suit years ago, and we have total confidence in our systems, practices and approaches to working with consumers,” said Ashish Masih, Encore’s president and CEO.

According to the statement, Encore’s efforts to implement the CFPB’s requirements under the 2015 consent order were thorough and effective except for a very small number of instances. In response, Encore quickly worked to refine its processes and make necessary adjustments to improve its operations, according to the company’s statement. The company also provided appropriate relief for impacted accounts more than three years ago.

Concluding Encore’s statement, Call said, “We’ve long believed that the rulemaking process is the most appropriate method for establishing industry standards. We also believe the forthcoming rules, expected to be issued this month, will be largely consistent with practices we’ve had in place for years, which should strengthen our competitive position in the marketplace by ensuring that all companies, large and small, are held to the same high standards we abide by every day.”


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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