CFPB Files Complaint Against Company for Illegally Collecting Debts
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December 07, 2015

The Consumer Financial Protection Bureau (CFPB) filed a complaint against a debt collection company for reporting and collecting on old and often incorrect debt.

According to the complaint against EOS CCA (EOS), a Massachusetts debt collection firm, the company reported and collected on old cellphone debt that consumers disputed and EOS did not verify. The company also provided inaccurate information to credit reporting companies about the debt and failed to correct reported information that it had determined was inaccurate.

If approved by the court, the consent order would require EOS to overhaul its debt collection practices, refund at least $743,000 to consumers, and pay a $1.85 million civil money penalty.

In 2012, EOS paid AT&T $35.4 million for a portfolio of more than three million cellphone accounts with a total face value of $2.3 billion. Many of these debts were old accounts that had been previously sent to multiple collection agencies.

The CFPB's investigation found that EOS learned in January 2013 that, contrary to the sales agreement with AT&T, the portfolio it purchased contained fraudulent debts, debts that consumers had paid or settled, and debts that were so old that they could no longer be legally collected. When consumers disputed the debts, EOS had difficulty getting AT&T to provide sufficient, and in some cases, any documentation to verify the debts. Notwithstanding those issues, EOS continued to report and collect on certain disputed debts that EOS did not verify.

In addition, shortly after it started collecting on the portfolio, EOS reported to the credit reporting companies that all three million of the debts were disputed by consumers, when EOS knew not all of the accounts had been disputed. EOS flip flopped on this twice, removing the dispute flags and then reinserting the dispute flags a month later.

These practices violated the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The EOS complaint can be found here.

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