CFPB proposes a legal settlement against a collection company


The Consumer Financial Protection Bureau (CFPB) has filed a settlement to resolve a lawsuit against a debt collection company and its owner.

© Shutterstock

In the lawsuit, the CFPB alleges that Fair Collections & Outsourcing (FCO) violated federal law by failing to establish reasonable written policies regarding the integrity of the information it provided to credit bureaus. Further, the CFPB alleges that the Maryland-based company failed to conduct reasonable investigations into indirect consumer disputes, which left inaccurate information on consumer credit reports.

Further, the CFPB claims that company owner Michael Sobota broke federal law when the FCO said consumers owed certain debts when in fact the FCO did not have a reasonable basis for asserting that consumers owed these debts.

The proposed settlement would require FCO and Sobota to put in place reasonable policies and procedures to prevent future violations and pay a civil fine of $ 850,000.

“As we recover from the economic devastation caused by COVID-19, credit reports play a huge role in the financial lives of consumers. Inaccurate information, such as tenant debt information, can be devastating for someone applying for a loan, looking for new housing or trying to find a new job, ”said Dave Uejio, acting director of CFPB . “We will not tolerate companies that put inaccurate data on consumer credit reports or do not investigate consumer disputes.”

The proposed settlement seeks to resolve CFPB’s ongoing lawsuit against FCO and Sobota, which was filed in Maryland Federal District Court in September 2019.

Source link

Leave A Reply

Your email address will not be published.