A Glimpse into the FTC: FTC Submits Annual Summary to the CFPB

Under Dodd-Frank, the CFPB, rather than the FTC, is responsible for submitting to Congress annual reports concerning the FDCPA.  The FTC announced Monday that it has submitted to the CFPB its annual summary of its work on debt collection issues the past year.  

The eighteen page letter offers a glimpse into the agency’s approach and priorities as to debt collection issues. Touting itself as primarily a law enforcement agency, the FTC continues to be aggressive in enforcement actions.  Its letter noted that in recent years, it has focused on bringing a greater number of cases and obtaining stronger monetary and injunctive remedies against debt collectors.  These are the key take aways and trends to watch in 2015:

                Aggressive Enforcement.

·         The FTC filed 10 new debt collection cases in 2014, a record number.

·         The FTC resolved nine cases, obtaining nearly $140 million in judgments, including FTC v. Asset & Capital Management Group, which netted a record $90.5 million judgment.

 ·         The FTC has permanently banned 47 companies and individuals from ever working in debt collection again.  The FTC‘s message regarding this issue has been a focal point in recent weeks.  Its blog last week announced a published list of banned companies (http://www.ftc.gov/enforcement/cases-proceedings/banned-debt-collectors).

Certain Practices Targeted.

·         Deceptive, Unfair or Abusive Collector Conduct. The letter shines a spotlight on the agency’s efforts to pursue debt collectors that secure payments from consumers by falsely threatening litigation or arrest or otherwise falsely implying they are involved in law enforcement.  See, e.g., FTC v. Asset & Capital Management Group; FTC v. Federal Check Processing, Inc.; FTC v. Payday Financial, LLC; FTC v. Goldman Schwartz, Inc.;  FTC v. National Check Registry, LLC; United States v. Credit Smart, LLC.

·         Phantom Debt Collection.  In 2014, “phantom debt collection” was another focus of the FTC.  The FTC pursued debt collectors that attempted to collect debts that either did not exist or were not owed to the phantom debt collector. The FTC noted that all of these were related to fraudulent payday loan related operations and reiterated its focus on the payday loan market.  See e.g., FTC v. Centro Natural Corp.; FTC v, Williams, Scott & Associates, LLC; FTC v. Pinnacle Payment Services, LLC

·         Consumer Data Breaches.  The FTC continues to pursue two cases involved data breaches where debt sellers impermissibly posted personal identifying information of consumers on public websites.  See, e.g., FTC v. Bayview Solutions, LLC; FTC v. Cornerstone and Company.

·         Protection of Limited English Proficient Consumers from Illegal Debt Collection Practices. The FTC noted it commitment to pursuing agencies who target Spanish speaking consumers with abusive debt collection practices.  The FTC brought three cases which illustrate this commitment: FTC v. Rincon Management Services, LLC; FTC v. RTB Enterprises, Inc.; FTC v. Centro Natural Corp.

 Partnership with the CFPB.

·         Joint Amicus Curiae Briefs.  The FTC filed joint briefs with the CFPB in two appellate cases in 2014 reflecting the agencies’ commitment to working together and similar view as to certain issues – time barred debt and initial communications.

·         Rulemaking.  The FTC acknowledged that it is working with the CFPB concerning proposed rulemaking concerning debt collection.  The proposed Regulation F is widely expected to be published in 2015.

The full letter can be found here. http://www.ftc.gov/system/files/documents/reports/federal-trade-commission-enforcement-fair-debt-collection-practices-act-report-consumer-financial/150209cfpbreport.pdf.