Enforcement Actions And Judgments Against Debt Buyers, Debt Sellers, and Debt Collectors
This page lists in alphabetical order the major enforcement actions and notable private litigation against the largest debt buyers, debt sellers and debt collectors in the U.S, along with narratives from the CFPB’s consumer complaints database. I try to keep it current. If you believe I am missing anything that ought to be listed here, please contact me. For information about Peter Holland and The Holland Law firm, click here.
- American Express
- Asta Funding
- Bank of America
- Chase Bank
- Frederick J Hanna Associates
- First National Bank of Omaha
- Midland Funding
- Nationstar Mortgage
- New Century
- Portfolio Recovery Associates
- Pressler & Pressler
- Wells Fargo Bank
Palisades Acquisitions XVI LLC (and similarly named companies) and Palisades Collections, LLC are subsidiaries of Asta Funding, a publicly traded company.
4/15/2015 – New York A-G action: Asta filed suits past the statute of limitations and obtained judgment in New York. Asta was required to vacate $1.7 million in judgments and pay $100,000 in fines.
Bank of America is a national bank, subject to OCC regulation. BoA services its credit card accounts through an affiliate – FIA Card Services.
5/29/2015: OCC Consent Order: BoA was fined $30 million by the Office of the Comptroller of the Currency. The OCC found that BoA violated the Servicemembers Civil Relief Act and filed affidavits executed by its employees which claimed to be made on personal knowledge, or on a review of books and records, when they were not based on any such knowledge or review.
4/9/2014: CFPB Consent Order: The CFPB found that BoA had engage in deceptive marketing of credit card add-on products. BoA was ordered to pay $727 million in consumer relief by the CFPB. . The OCC fined BoA $25 million for the same actions.
9/2013: Private Lawsuit: BoA paid $32 million to settle a class action alleging that it violated the Telephone Consumer Protection Act by making autodialed and pre-recorded debt collection calls and texts to cell phones.
CACH, LLC is owned by SquareTwo Financial, an investment firm. It is said to operate a “franchise” business model, in which CACH itself, while owning the debts, does none of the actual collection work, leaving that to local affiliates, either collection firms or attorneys. CACH is sometimes also identified as CACV, or by the former name of its parent company: Collect America. Perhaps due to this structure, it is unclear how many CFPB consumer complaints exist against CACH-related entities.
An unusually large number of CACH debt-buying agreements are available: 2007, 2009, April 2010, April 2010, September 2010, October 2010, May 2011, August 2011, March 2013, April 2013, May 2013, June 2013. Most are between CACH and BoA’s affiliate, FIA Card Services.
6/23/2011: Private Lawsuit: Maine’s Supreme Judicial Court found that CACH was unable to collect a debt where the original contract had been destroyed and the amount and existence of the debt were “supported only by assertion[s]” by a Bank of America official and CACH’s own employees.
3/4/2011: Private Lawsuit: A $250,000 punitive damages jury verdict against a Collect America affiliated law firm was upheld on appeal. The firm had sued on statute barred debt after Collect America incorrectly told them that the statute of limitation had been tolled due to a payment by the consumer.
10/15/2008: Nevada A-G action: A law firm working on behalf of CACH was ordered to cease and desist from collecting debts in Nevada for failure to be licensed, either to collect debts or practice law, within the state.
2/25/2002: South Carolina State Bar: an attorney operating a “Collect America” franchise – the Zenner Law Firm, was publicly reprimanded by the South Carolina Bar for misconduct by his debt collector employees.
CashCall is a privately owned non-bank finance company that specializes in lending money to people with bad credit.
9/31/2016: CFPB Lawsuit – A Federal District Court granted partial summary judgment in favor of the CFPB and denied summary judgment to CashCall. The CFPB sued CashCall and its affiliates for violating state usury laws by making loans through Western Sky Financial, a lender located on a Federal Indian Reservation. The suit continues.
6/23/2016: State Lawsuit – The Maryland Court of Appeals upheld the Maryland Commissioner of Financial Regulation’s order prohibiting CashCall from illegally engaging in “credit services business” in Maryland. CashCall had used a “rent-a-bank” arrangement with two federally regulated banks in an attempt to avoid Maryland’s interest rate cap.
8/24/2009: California A-G Action – a Final Judgment was entered against CashCall in California State Court prohibiting CashCall from making false statement about interest rates. CashCall paid the A-G’s office $1,000,000 in penalties and costs.
Cavalry appears to be a complex web of related entities. Cavalry Portfolio Services, LLC appears to be the servicer of accounts for other Cavalry entitles, typically Cavalry Special Purpose Vehicles (SPVs) followed by a number. A 2003 servicing agreement between Portfolio Services and SPV I is available. Cavalry Investments in the parent company of the group. As of 6/2/2015 there were 490 CFPB consumer complaints against Cavalry.
10/5/2015: Colorado A-G action: Cavalry fined $17,385 for violation for state FDCPA.
3/31/2015: Arizona Department of Financial Institutions action: Cavalry was fined $175,000 for failure to respond to consumer requests for validation of debts Cavalry sought to collect.
9/9/2011: Purchase Agreement: Cavalry purchased a portfolio of credit card debt from FIA Card Services (an affilicate of BoA). The purchase agreement contained various disclaimers, however key disclaimers in this document appear to be redacted.
6/2010: West Virginia A-G action; Cavalry was sued for collecting debts in the state without a license.
10/29/2008: Purchase Agreement: Cavalry purchased a portfolio of credit card debt from FIA Card Services (an affiliate of BoA). The purchase and sale agreement disclaimed representations as to the accuracy of any information provided, including balances, and as to compliance of the loans sold with federal or state law.
06/07/2002: Purchase Agreement: Cavalry purchased a portfolio of debt from Midfirst Bank. The purchase agreement disclaimed representations as to the accuracy of most information and documentation.
1/4/2016 – OCC Consent Order: JPMorgan agreed to pay $48 million for violating the terms of a previous 2011 OCC Consent Order related to Chase’s “deficiencies and unsafe or unsound practices in residential mortgage servicing and in Chase’s initiation and handling of foreclosure proceedings.” In the 2016 Consent Order, the OCC found that Chase had again engaged in unsafe and unsound practices, and had violated the Bankruptcy Rules.
The specific unsafe and unsound practices enumerated in the January, 2016 Consent Order included the fact that “between December 1, 2011, and November 19, 2013, the Bank filed in United States Bankruptcy Courts:
(a) approximately 460 inaccurate Payment Change Notices (“PCNs”) that did not provide the borrower with the correct payment change amount or the correct date that the new payment change would go into effect;
(b) approximately 2,500 PCNs that were untimely under the Bankruptcy Rules;
(c) approximately 4,380 PCNs using the signature and Bankruptcy Court’s Case Management/Electronic Case Filing credentials (“ECF Credentials”) of an individual who no longer worked for the Bank at the time the PCNs were filed; and
(d) approximately 2,285 PCNs using the signature and ECF Credentials of a Bank employee who no longer worked in the Bank’s bankruptcy department at the time the PCNs were filed.”
11/2/2015 – California Attorney General action: Chase stipulated to judgment in a suit alleging that it violated SCRA, state FDCPA and other California laws, agreeing to $50 million in restitution and an additional $50 million in penalties and other payments to California.
7/8/2015 – National action: 47 Attorneys-General, the CFPB and OCC joined in a settlement with Chase. Chase to pay $50 million in refunds, $60 million in federal penalties and $107 million to the states, cease collecting on 528,000 accounts and reforms its debt-selling practices, in particular cease robo-signing, prohibit debt re-sale and cease selling inadequately documented accounts
March, 2015 – U.S. Trustee Program Settlement: Chase allegedly filed inaccurate notices and statements regarding mortgages in Bankruptcy cases. Chase paid more than $50 million.
December, 2013 – Mississippi Attorney General action: Chase was sued for “egregious” debt collection conduct, including robo-signing documents and inadequate record-keeping.
November, 2013 – National Settlement: Chase agreed to pay $13 billion to settle allegations related to its sale of mortgage backed securities prior to the Financial Crisis.
September, 2013 – OCC Consent Order: the OCC found that Chase produced affidavits that were improperly notarized, falsely claimed to be based on personal knowledge, or which contained financial errors in favor of Chase. The OCC imposed additional compliance measures on Chase.
September, 2013 – CFPB Consent Order: Chase was ordered to refund $309 million to 2.1 million consumers to whom it had charged illegal fees.
December, 2010 – Private Indemnity and Hold Harmless Agreement: Chase agreed to indemnify several debt buyers after it illegally added fees to 10,000 charged-off accounts before selling them.
December, 2009 – Chase sold a portfolio of judgments to DebtOne, LLC, disclaiming representations and warranties. Chase employee Linda Almonte, in a whistleblower suit against Chase alleged that Chase had committed fraud, because the pool of judgments sold included cases involving fraud and inaccurate records. Chase moved to dismiss on the grounds that its disclaimer of warranties meant the sale was not fraudulent.
A national bank with various subsidiaries.
7/21/2015 – CFPB and OCC Consent Orders: Citibank charged 8.8 million customers for debt cancellation and identity theft protection add on products on credit cards which customers did not want, or which were not in fact provided. Citibank is to pay at least $700 million.
8/4/2014 – Hawaii A-G Action: Hawaii settled a suit against Citi for improper marketting and sale of credit card add-on products. Citi paid $11.3 million.
12/2/2013 – Mississippi A-G Action: Mississippi sued Citi for deceptive marketing of add-on products and for charging consumers for products they did not agree to buy. Citi sought to remove the case to U.S. district court, but, on appeal, the case was sent back to Mississippi state courts. The Citi later settled the case.
3/29/2011 – OCC Consent Order: OCC found that Citibank had filed false affidavits in lawsuits and foreclosed without proper documentation.
2/28/2002 – A-G Action: 27 states including Maryland settled an action against Citibank regarding deceptive telemarketing of credit card add on products.
A multi-state debt collection law firm, in Georgia, Florida and South Carolina. It is associated with Georgia Receivables, Inc., a debt buyer.
December 2015 – CFPB Consent Order (Proposed): To resolve the July 2014 CFPB complaint, Hanna, agrees to pay $3.1 million in penalties and not to file or threaten to file collection lawsuits without first actually possessing and reviewing the documents to prove their case.
10/20/2015 – Colorado A-G action: Georgia Receivables was denied renewal of its collection license in Colorado for failing to disclose the CFPB’s action against Frederick J. Hanna, it’s Executive Director.
July 2014 – CFPB Lawsuit: Hanna alleged to be running an “assembly line” for lawsuits with no meaningful attorney review. Hanna’s motion to dismiss was denied in July 2015. Hanna’s motion to certify an interlocutory appeal from the denial of the motion to dismiss was denied in November 2015.
First National Bank of Omaha (FNBO) is an Omaha based National Bank.
8/25/2016: CFPB Consent Order: FNBO sold “debt cancellation” add-on products to consumers using deceptive methods such as telling them that they were merely updating their account, or agreeing to receive information regarding products, rather than making a purchase. FNBO will pay $27.75 million to consumers and a $4.5 million penalty to the CFPB.
4/13/2016 – OCC Consent Order: HSBC sold customers a credit card add-on product, collected fees for it, took a share of the fees, but many customers never received the credit monitoring service they paid for. HSBC will pay a $35m penalty.
LVNV is a national debt buyer.
5/20/2016: Private Lawsuit: A jury in Baltimore, Maryland, awarded $38.6 million to a class of people sued by LVNV.
Midland Funding, LLC and Midland Credit Management, LLC are subsidiaries of Encore Capital, a publicly traded company. As 6/2/2015, Midland had 4431 CFPB consumer complaints against it In 2013, Midland bought smaller debt buyer Asset Acceptance.
9/9/2015: CFPB Consent Order: the CFPB ordered Encore to pay $42 million to consumers, pay a $10 million penalty and cease collecting on over $125 million in consumer debts. The CFPB found that Encore had engaged in deceptive debt collection tactics.
4/3/2015: New York City Dept. of Consumer Affairs: Midland Credit Management and affiliates settled allegations that they violated city laws for $670,000.
2/2/2015: Colorado A-G action: Midland Credit Management was fined $23,000 for violation of the state FDCPA.
1/9/2015: New York A-G action: Encore Capital was fined $675,000 by the New York Attorney General for filing collection suits on statute barred debts in New York State.
3/2012: West Virginia A-G action: Midland was sued by the West Virginia Attorney general for filing affidavits falsely claiming personal knowledge.
12/15/2011: Minnesota A-G action: Midland Funding consented to a judgment in a suit by the Minnesota Attorney General for filing affidavits falsely claiming personal knowledge in collection actions in that state. The judgment required Midland to reform its practices, in particular regarding affidavits and verification of debts.
7/8/2011: Texas A-G action: Encore Capital was sued by the Texas Attorney General for filing affidavits falsely claiming personal knowledge in Texas collection lawsuits. The suit was settled on undisclosed terms in December 2011.
10/21/2011: Private Lawsuit: Midland entities settled allegations (later rejected on appeal as being insufficient) of robosigning affidavits, which falsely claimed personal knowledge. A new settlement in this case was finally affirmed in July 2016.
Nationstar Mortgage is a large, national mortgage servicing company with various subsidiaries and trading names including Solutionstar and Xome.
11/9/2015 – Class Action: Nationstar settled allegations that it cheated consumers by charging them for expensive “force-placed” property insurance if the consumers did not have insurance, so that Nationstar could receive kickbacks from its chosen insurer. Nationstar agreed to pay back 12.5% of the force-placed insurance premiums.
10/14/2015 – Class Action: Nationstar is in the process of settling a class action alleging that it robo-called both customers and non-customers in violation of the TCPA. The settlement fund is likely to be $12 million. The settlement has not been finally approved and notice has not been made to the class, as of 1/11/2016.
10/3/2014 – Court Order: Nationstar was found to have willfully violated the discharge injunction by a bankruptcy court in Ohio.
6/6/2014 – Court Order: Nationstar was sanctioned $10,000 for violating the automatic stay in a bankruptcy case in New York.
9/12/2013 – Press: Nationstar admitted that it foreclosed on a house even though the owners were not behind on their mortgage modification. The sale was rescinded following press enquiries.
8/30/2012 – Oregon Consent Order: The Oregon Department of Consumer & Business Services examined Nationstar and found “deficiencies in criminal background checks, unlicensed loan originator activity . . . and various Truth in Lending Act disclosure violations”
11/30/2011 – Massachusetts Consent Order: The Massachusetts Commissioner of Banks ordered Nationstar to pay a $25,000 fine for violations of the Home Mortgage Disclosure Act.
3/29/2010 – New Jersey Consent Order: Nationstar Mortgage, trading as Champion Mortgage, paid a $2,000 and agreed to cap its origination fees for second mortgages.
1/15/2008 – Arizona Consent Order: The Arizona Superintendent of Financial Institutions found that Nationstar violated various licensing and disclosure laws.
Often called the largest debt collector in the world, as of 2011 (see Linda Todd v. NCO Financial Systems, Inc., 1:11-cv-07352), NCO was majority owned by JP Morgan Chase.
July 2013 – FTC consent Order: NCO repeatedly made collection calls to the wrong people; left voicemails on third-party phones alleging money was owed. NCO ordered to pay $3.2 million and enter into a permanent injunction.
August 2012 – Private lawsuit: NCO sued by a restaurant chain after harassing calls to one of its employees at work.
February 2012 – Minnesota Commerce Department Settlement: NCO hired convicted felons as debt collectors; fined $250,000.
February 2012 – Multi-state settlement: 19 state A-Gs settled with NCO; NCO to pay $1.5 million
December 2008 – Texas A-G Settlement: NCO made harassing and threatening phone calls; paid $400,000.
May 2004 – FTC Consent Order: NCO “re-aged” debts so that they stayed longer on credit reports; NCO paid $1.5 million.
New Century Financial Services, Inc. is a closely-held, New Jersey based debt buyer.
4/25/2016: CFPB Consent Order: New Century hired attorneys to collect debts by filing suit, but failed to provide attorneys with account level documentation of the debts and knew its attorneys filed suit without meaningful review. New Century must pay $1,500,000 in civil penalties to the CFPB.
Ocwen Loan Servicing is a national mortgage servicer specializing in the servicing of defaulted mortgages and is based in Florida. It is owned by Ocwen Financial. Ocwen has a number of associated companies, Home Loan Servicing Solutions (another servicer), Altisource Portfolio Services (a default management business), Altisource Residential Corp (an investor in distressed residential properties) and Altisource Asset Management Corp (providing management services to Altisource Residential).
2/22/2016 -SEC Consent Order: Ocwen was ordered to pay $2 million penalty for misstated financials and failing to prevent the conflicts of interests that led its Chairman, Erby to step down in late 2014.
3/24/2015 – Press: Ocwen sold more than $25 billion in loans to Nationstar.
3/3/2015 – Press: More than $1 billion in mortgage servicing rights were sold by Ocwen affiliate Altisource to third-parties.
1/23/2015 – Press: An investor in loans serviced by Ocwen accused Owen of violating various aspects of its servicing agreement, arising from the New York Department of Financial Services settlement in December 2014.
1/23/2015 – California Consent Order: The California Department of Business Oversight fined Ocwen $2.5 million and prohibited Ocwen from buying new servicing rights to mortgages in California until it complied with the Department’s request for information. Ocwen had repeatedly failed to co-operate with the Department, which had begun proceedings to suspend Ocwen’s license.
12/19/2014 – New York Consent Order: The New York Department of Financial Services found that Ocwen had violate various provisions of a 2011 settlement with the Department, including:
- failing to confirm that it had the right to foreclose before starting foreclosure proceedings;
- failing to ensure its statements to the courts in foreclosure cases were true;
- dual tracking
The Department also criticized Ocwen’s “Inadequate and Ineffective” computer systems, and numerous conflicts of interests arising from Ocwen’s use of Altisource for certain services. Altisource was owned by the Executive Chairman of Ocwen.
The Executive Chairman, William Erby agreed to resign, as discussed in the press. Ocwen was ordered to pay $150 million in fines and restitution.
3/4/2014 – Nationwide Consent Judgment: Ocwen consented to judgment in an action brought by the CFPB and 49 States. Ocwen was ordered to spend $2 billion on relief for homeowners facing foreclosure and pay $125 million in redress to homeowners who were wrongfully foreclosed on. The investigations of the CFPB and the States found that Ocwen engaged in rob signing court documents, misled consumers about their options to avoid foreclosure and made servicing errors that forced some people into foreclosure unnecessarily.
12/5/2012 – New York Consent Order: the New York Department of Financial Services found that Ocwen had been violating the 2011 agreement about its mortgage servicing practices and appointed an independent monitor to conduct a compliance review.
12/15/2011 – New York Agreement: Ocwen and the New York Department of Financial Services entered into an agreement on mortgage servicing practice.
Portfolio Recovery Associates, LLC is a subsidiary of Portfolio Recovery Associates, Inc., a publicly traded company.
9/8/2015: CFPB Consent Order: PRA was fined $8 million, and required to pay $19 million and cease collection of $8 million in debt for various violations of federal consumer protection law.
8/14/2015: Colorado A-G action: PRA was fined $19,000 for violating the state’s version of the FDCPA.
5/15/2015: Private Lawsuit: A trial Jury in Missouri awarded compensatory and punitive damages of over $82 million against PRA after it sued her for someone else’s debt, despite having been told over a period of months that they had the wrong person. The trial court overruled PRA’s motion attacking the size of the award.
5/8/2014: New York A-G action: PRA was fined $300,000 by the New York Attorney General for filing collection suits on time barred debts in New York State. PRA was required to vacate over 2,000 judgments obtained between 2008 and 2014.
12/31/2010: The Wall Street Journal reported that PRA had been using affidavits signed in the name of the deceased “Martha Kunkle” for years. Although Kunkle died in 1995, and PRA decided to stop using affidavits signed in her name in 2008, such affidavits were still in use when the Journal investigated. PRA blamed employees of Providian Bank for writing the fraudulent affidavits.
8/18/2009: Missouri A-G action: PRA was sued by the Missouri Attorney General for attempting to collect debts not owed.
Pressler & Pressler LLP is a New Jersey-based collection law firm.
4/25/2016: CFPB Consent Order: Pressler & Pressler operated a collection-mill type operation, threatening to file and filing suit without substantial attorney involvement and without reviewing documentation supporting alleged debt. The firm must pay $1,000,000 civil penalty to CFPB.
6/30/2014: Bock v. Pressler & Pressler (US District Court, NJ): Consumer’s suit against Pressler & Pressler was allowed to proceed. Pressler’s attorney took 4 seconds to review the complaint against Bock before filing, and was therefore not meaningfully involved, in violation of FDCPA.
Santander is a multinational bank based in Spain.
Wells Fargo is a National Bank based in North Dakota
9/8/2016: CFPB Consent Order – Wells Fargo employees, in an effort to earn incentives offered by Wells Fargo, opened 1.5 million bank accounts and 0.5 million credit card accounts between 2011 and 2015 without the people named as account holders’ authorization. Wells Fargo will repay everyone who lost money, pay $100 million to the CFPB, $30 million to the OCC and $50 million to Los Angeles, CA.
8/20/2016: CFPB Consent Order – Wells Fargo’s Educational Financial Services business wrongly charged late fees to student loan borrowers who were not late, failed to explain how it applied payments, so that consumers would not predict the consequences of partial payment, or make partial payments in a way that would minimize fees. Wells Fargo will repay $410,000 to consumers and pay a $3.6m fine.