In March 2015, the CFPB sued “fraudulent debt-collection operation” that included collectors, payment processors and related groups, alleging they used “robo-calls, harassment and deception to try to collect on ‘phantom’ consumer debts that the victims didn’t actually owe.” The CFPB also sued the payment processors and related groups for failing “to stop fraudulent collection tactics” claiming they “‘should have known’ about the alleged violations.” The CFPB claimed “‘consumers paid millions of dollars’ because of the threats made by the debt collectors.” As of February 2017, the lawsuit is ongoing.

• The CFPB filed a lawsuit against Universal Debt Payment Solutions, LLC, Universal Debt Solutions, LLC, WNY Account Solutions, LLC et al. in US District Court for the Northern District of Georgia, Atlanta Division. [CFPB v. Universal Debt Payment Solutions, LLC, Universal Debt Solutions, LLC, WNY Account Solutions, LLC et al., case no. 1:15-cv-0859, filed 03/26/15]

• The CFPB sued debt collectors, payment processors and related groups for a “fraudulent debt-collection operation” accused of using “robo-calls, harassment and deception to try to collect on ‘phantom’ consumer debts that the victims didn’t actually owe.”

The CFPB claimed that owners of these firms “purchased consumers’ personal information, like dates of birth, Social Security numbers, names of family members and employment information, and used that to trick consumers into believing they were legitimate collectors. In their calls, the collectors claimed the consumers had committed check fraud, and threatened to call their employers. In response, the consumers gave up their credit and debit card information to make payments.” [Jonathan Epstein, “Feds take down bogus debt-collection operation based in Buffalo,” The Buffalo News, 04/08/15]

• The CFPB sued the payment processors and related groups for failing “to stop fraudulent collection tactics.” The lawsuit accused Universal Debt Payment Solutions and WNY Account Solutions of “harassing consumers about ‘phantom’ debts.” The CFPB not only sued the debt collectors, but also payment processors because the CFPB claimed they “‘should have known’ about the alleged violations.”

In the case filed by the_CFPB, the agency instead faults several payment processors for not stopping the fraudulent activities of a handful of debt collectors, even though the processors had monitoring systems in place that the agency claims should have unearthed such illegal activity. Because of that, the_CFPB_said the ‘debt collection scheme depended upon the participation of’ the payment processors and a telemarketing company.”

The complaint said that ‘consumers paid millions of dollars’ because of the threats made by the debt collectors, including_Universal Debt & Payment Solutions,_WNY Solutions Group, and Check & Credit Recovery.”

According to the CFPB, “‘the debt collectors used collectors and automated telephone broadcasting services to contact consumers and their family members to threaten consumers with false allegations of check fraud and false claims of debt owed, which would result, according to the debt collectors, in service of a ‘financial restraining order,’ notification to the consumer’s employer of the alleged fraud or debt, garnishment of wages, and arrest, unless the consumers paid the alleged debt.'” [Rachel Witkowski, “CFPB Files Massive Lawsuit Against Debt Collectors,” American Banker, 04/08/15]