CFPB Issues Consent Order for Debt Collector


The consent order is the result of a settlement for agency’s collection on judgments. Company responds on resolution with CFPB.

12/9/2020 8:00

The Consumer Financial Protection Bureau issued a consent order Dec. 8 for RAB Performance Recoveries LLC (RAB), according to a news release.

Through 2012, RAB, a New Jersey company, reportedly purchased and collected consumer debts from debt brokers, and through August 2014, it used collections law firms to obtain judgments against consumers, according to the CFPB, which states RAB’s actions are in violation of the Fair Debt Collection Practices Act and the Consumer Financial Protection Act of 2010.

RAB provided the following statement on the consent order to ACA International:

“RAB Performance Recoveries, LLC (RAB) has entered into a consent order to resolve a licensure dispute it had with the federal Consumer Financial Protection Bureau (CFPB).

Prior to January 2012, RAB was in the business of acquiring charged off consumer debt. The dispute raised by the CFPB concerned whether RAB was required to have certain licenses to acquire charged off installment loans, notes and contracts in New Jersey between July 2011 and August 2014 and to engage a third-party debt collection litigation firm between July 2011 and August 2014 in Rhode Island and during a brief twenty-four (24) day period in Connecticut back in October 2013.

No consumers were misled or deceived by RAB. RAB was and remains fully compliant with all laws and regulations pertaining to its business. Well before its dispute with the CFPB, RAB had in place a robust compliance management system. To be sure, the exhaustive CFPB inquiry of RAB resulted in a consent order identifying only a very small number of RAB owned charged off accounts receivable that the Bureau contends were subject to licensure.

RAB has properly conducted its business operations in each of the subject states and, to that point, none of the states at issue have taken adverse action against RAB. In fact, the question of whether entities like RAB must be licensed in New Jersey and Rhode Island is unsettled. Given the significant cost and expense that RAB would have incurred in continuing its fight, RAB agreed to resolve the matter with the CFPB.”

The consent order from the settlement prohibits RAB from collecting on the judgments against, or payment agreements from, consumers it obtained in Connecticut, New Jersey and Rhode Island. It also requires RAB to take all necessary steps to vacate those judgments and suspend collection of those judgments and to notify consumers with payment agreements that they have been satisfied. The consent order requires RAB to pay a $204,000 civil money penalty.