California DFPI penalties collection agency

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The California Department of Financial Protection and Innovation (DFPI) filed an injunction and injunction on September 22, imposing civil sanctions against California debt collector and buyer F&F Management. This is the first enforcement action the DFPI has released against a debt collector for violating the recently enacted California Consumer Financial Protection Law (CCFPL).

Under the order, F&F violated California and state laws by:

  1. Debt Parking, providing negative credit information for consumer debt allegedly owed by consumers in multiple states, without giving consumers 30 day notice under Section 1785.26 of the Civil Code, subdivisions (b) and (c) of California Consumer Credit notify Law on Registration Offices (CCRAA).
  2. Leaving a non-compliant voicemail message without disclosing the identity of the collection agency or basic information about the debt, in violation of Section 1788.11 of the Civil Code, subsection (b) of the Rosenthal Act of California.

Additionally, the DFPI implies that F&F has violated Section 808 of the Fair Inkasso Practices Act [15 U.S.C Section 1692f] by attempting to collect unfounded debts and unfounded fees.

Ultimately, the DFPI concluded that F&F had failed to provide the written notice required by FDCPA Section 809 [15 U.S.C 1692g] and, in some cases, continued to attempt to collect debts despite receiving letters from consumers requesting validation under 1692g and further telling consumers (including those who requested validation) that their fees were down in the event a failure would multiply significantly in a timely manner.

DFPI imposed a $ 375,000 administrative fine on F&F, which F&F must pay by October 22.

“This move highlights just some of the illegal and dishonest acts that can inflict tremendous consumer damage and plague the debt collection industry and how DFPI can deal with them,” said Suzanne Martindale, Senior Deputy Commissioner of the Consumer Financial Protection Division, in a press release .

The company is obliged to refrain from and refrain from illegal acts or practices in connection with the FDCPA, the Rosenthal Fair Inkasso Practices Act and the CCRAA.

When there are malicious actors involved in activities that harm consumers, ACA strives to support all efforts to weed them out.

Read the complete order of the DFPI here.

California license and regulation drafts

In the meantime, DFPI continues to seek comments on the CCFPL and the Debt Collection Licensing Act (DCLA) through October 5. ACA previously reported.

On April 8, 2021, the representative of the DFPI initiated a regulation process in order to issue regulations on the admission requirements according to the DCLA. The Commissioner is now considering a second rule to adopt rules on other provisions of the DCLA, including its scope, annual reports and loan amounts.

The Commissioner invites interested parties to help develop rules on these issues and has raised questions to assist these parties in providing this input. The Commissioner also invites interested parties to provide sample language for regulations on these issues.

Agencies also need to be aware of the new California licensing requirements under the DCLA that require California debt collectors and buyers to apply for a license with DFPI by December 31, 2021.

The license application is now available on the Nationwide Multistate Licensing System website, ACA previously reported.

The DCLA, which goes into effect January 1, 2022, requires that anyone who runs debt collection companies in California be licensed by DFPI.

The ACA licensing team has resources to help members navigate the licensing process.

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