Profiles in Harassment

The Consumer Financial Protection Bureau (CFPB) has proposed letting debt collectors send consumers an unlimited number of texts and emails, benefitting debt collectors with tens of thousands of complaints that consumers have filed about them with the bureau.

Under Kathy Kraninger’s leadership, the CFPB has proposed allowing debt collectors to send consumers an unlimited number of texts and emails. While the proposed rule purports to limit phone calls from debt collectors, it could actually result in consumers receiving dozens of unwanted calls per week.

Looking at the records of just five of the nation’s top debt collection companies—Transworld Systems, Inc., Portfolio Recovery Associates, Encore Capital Group, Sherman Financial Group, and Pioneer Credit Recovery—it is clear that debt collectors have a troubling history of harassing consumers while attempting to collect on debt. In fact, consumers have filed over 34,600 complaints with the CFPB just about these five companies.

The agency responsible for protecting consumers shouldn’t make it easier for debt collectors to harass consumers—the CFPB must step in and protect consumers, not the debt collection industry.

Get more details below, download our full research report here, and take action to protect consumers from harassment and abuse from debt collectors.


Transworld Systems, Inc. (TSI): A “Prolific” Debt Collector Fined Millions By Regulators For Harassing Consumers And Illegally Filing Thousands Of “False Or Misleading” Lawsuits

Transworld Systems, Inc. (TSI), a top debt collection company that has spent at least $200,000 on federal lobbying, has had thousands of consumer complaints filed against it with the Consumer Financial Protection (CFPB) and Federal Trade Commission (FTC), both of which have hit the debt collector with massive fines. TSI is known as a “prolific” debt collector that filed over 38,000 lawsuits against student loan borrowers in just a three-year period, using an “assembly line” process where legal documents were created with automated software and signed by low-level employees with no legal training.

TSI was fined $2.5 million by the CFPB in 2017 for illegally relying on “false or misleading” filings for hundreds of lawsuits against student borrowers. Several years earlier, the FTC hit TSI’s then-parent company with a record $3.2 million fine for “harassing and abusing debtors,” including revealing personal information to third parties and pursuing the wrong consumers for debts that weren’t theirs.

In addition to pursuing student loan debts, TSI has been hired by school districts, including in Pennsylvania, Rhode Island, and Iowa, to collect school lunch debt. Empowering people who shake down parents over their children’s school lunch money: just another day for the Trump administration.


Portfolio Recovery Associates: One Of The Country’s Biggest Debt Collectors Has Had To Pay Over $127 Million To Settle Charges Of Illegal Collection Practices, Including Misleading Consumers To Get Them To Agree To Receive Auto-Dialed Cell Phone Calls

Portfolio Recovery Associates is a subsidiary of PRA Group, “one of the country’s largest debt-recovery funds” with over 5,000 employees. Even though the company has been ordered to pay over $127 million to settle charges of illegal collection practices in recent years, PRA Group’s CEO made almost $4 million last year.

Portfolio Recovery Associates has faced numerous class action lawsuits alleging illegal debt practices, including harassing consumers with robocalls, and was ordered to pay $18 million to settle a lawsuit alleging that it made “autodialed phone calls to consumers without their consent.”

The CFPB ordered Portfolio Recovery Associates to pay up to $27 million for illegal debt collection practices, including getting consumers to agree to receive auto-dialed calls on their cell phones by telling them it was the only way to “prevent collection calls to their cell phones before 9 a.m.”


Encore Capital Group: One Of The Country’s Largest Debt Collectors Was Ordered To Pay Up To $52 Million To Settle Allegations That It Used Deceptive Tactics To Collect Bad Debts And “Robo-Signed” Legal Documents Against Consumers

The CFPB described Encore Capital Group as “the nation’s largest debt buyer and collector” when it ordered the company to pay up to $52 million for illegally attempting to collect on bad debts in 2015. It wasn’t the last time Encore was fined millions by regulators; last year, the debt collector was ordered to pay over $6 million to settle a multistate investigation by 42 attorneys general into its practice of “robo-signing” legal documents against consumers.

Encore Capital Group, whose CEO raked in $2.8 million last year and currently holds $4.4 million worth of company stock, has spent $270,000 on federal lobbying since Donald Trump took office.


Sherman Financial Group: Debt Collection Behemoth That Has Bought Billions Of Dollars In Unpaid Debt And Faced Legal Action For Predatory Collection Practices

Sherman Financial Group is a huge debt collection company with 1,500 employees, which likely earned over $2 billion in 2016. Its founder and CEO, Ben Navarro, is an ex-Wall Street banker worth about $3 billion; he made headlines last year in a failed attempt to buy an NFL football team valued at over $2 billion.

Debt collector subsidiaries of Sherman Financial Group, including LVNV Funding and Resurgent Capital Services, have been ordered to pay millions to settle allegations of illegal debt collection practices, including operating without licenses and making false claims against consumers.

Sherman Financial Group even gets debt collection business directly from one of its most controversial subsidiaries—Credit One Bank, which offers one of the most complained-about credit card companies in the country. Credit One reported making $579 million from account fees in 2017—and sells unpaid consumer debt right back to its parent company for collection.


Pioneer Credit Recovery: The Debt Collection Arm Of Student Loan Servicer Navient Has Faced Lawsuits And Enforcement Actions For Misleading And Harassing Consumers, Like The Family Of A Military Servicemember It Inundated With Threatening Phone Calls

Pioneer Credit Recovery is the debt collection arm of Navient, one of the largest student loan servicers in the country, which has faced its own share of scrutiny for its loan servicing practices. Pioneer Credit Recovery was named in a lawsuit brought by the CFPB alleging that Navient failed borrowers “at every stage of repayment” and charged that the debt collection subsidiary made false and misleading statements to borrowers while pursuing student loan debt.

Pioneer Credit Recovery has repeatedly given consumers financially risky advice, like suggesting that borrowers take out second mortgages or withdraw early from their retirement funds, in order to collect on debt. The debt collector was even sued for repeatedly calling and harassing a military servicemember’s wife while he was stationed in Iraq, including by threatening to put a lien on their house, garnish his wages, and calling her “‘scum.’”

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