Consumer Bureau Action Tracker

CFPB – Encore Capital Group and Portfolio Recovery Associates


State

Nationwide

target

Encore Capital Group, Inc., Midland Funding, LLC, Midland Credit Management, Inc. and Asset Acceptance Capital Corp.

Topics

Enforcement, Debt Collection

In 2015, the CFPB took action against “the nation’s largest debt buyer,” Encore Capital Group, for “employing deceptive practices to collect on bad debts.” The bureau also cited “Portfolio Recovery Associates, which is the nation’s second-largest debt collector” for the same allegations. Encore Capital Group was “required to pay up to $42 million in consumer refunds, plus a $10 million penalty, and halt collection on more than $125 million in debts.” Portfolio Recovery Associates “was ordered to pay $19 million in refunds, plus an $8 million penalty, and cease collecting on more than $3 million in debts.”

  • The companies “would try to collect on incorrect balances or they would sue individuals in state courts with the hope that the consumers would not mount a defense and as a result, the firms would win the lawsuits by default” and “would pressure consumers to make payments, relying on inaccurate statements.” Together, the two companies “had purchased the rights to collect more than $200 billion in defaulted consumer debts on credit cards, phone bills and a variety of other accounts.” [Lori Weisberg, “Bureau: Encore, Portfolio Recovery used illegal practices to gather funds,” The San Diego-Union Tribune, 09/19/15]
  • Encore Capital Group was “required to pay up to $42 million in consumer refunds, plus a $10 million penalty, and halt collection on more than $125 million in debts.” Portfolio Recovery Associates “was ordered to pay $19 million in refunds, plus an $8 million penalty, and cease collecting on more than $3 million in debts.” In both cases, “the refunds that were assessed were related to debt that could no longer be collected because the statute of limitations had already passed.” The companies were also “required to overhaul their methods, reform the way they collect debt through lawsuits, and stop reselling purchased debt to third parties.” [Lori Weisberg, “Bureau: Encore, Portfolio Recovery used illegal practices to gather funds,” The San Diego-Union Tribune, 09/19/15]

Status

Inactive or Resolved


2015-CFPB-0022 9/9/2015 9/9/2015

CFPB Takes Action Against the Two Largest Debt Buyers for Using Deceptive Tactics to Collect Bad Debts
http://www.consumerfinance.gov/policy-compliance/enforcement/actions/encore/

  • Consumer Financial Protection Bureau (CFPB)
  • Administrative filing
  • None
  • Nonbank
  • $177,000,000
  • Not Available

Close

Join The Fight!

We need your help to hold powerful special interests accountable and empower hardworking Americans. Join our fight today!