Debt Buyer Sued for Deceptive Practices of Downstream Third-Party Collectors; CFPB Uses Its Substantial Assistance Authority
On January 10, 2022, the Consumer Financial Protection Bureau (CFPB) filed a complaint in federal district court against three affiliated debt-buying businesses and the individuals who founded and operated them for “knowingly and recklessly [placing debts with and selling them to] debt collection agencies that used threats and misrepresentations to coerce payments from consumers.”
The corporate defendants are in the business of purchasing portfolios of defaulted consumer debt and then placing those portfolios with (or selling them to) third-party debt collectors. The CFPB alleges that the third-party debt collectors engaged in illegal debt collection practices, such as falsely threatening consumers with lawsuits and arrest, and that the defendants who placed the debt with (or in some cases sold it to) the debt collectors are directly liable for violating the Consumer Financial Protection Act and Fair Debt Collection Practices Act.
https://www.jdsupra.com/legalnews/debt-buyer-sued-for-deceptive-practices-8088853/
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