What debt collectors can learn from the FTC settlement with GC Services

what debt collectors can learn from FTC settlementLast week, we wrote about the settlement agreement between the FTC and debt collector GC Services Limited Partnership. In most circles, the $700,000 civil money penalty would be the most significant aspect of the settlement. In our opinion, however, the most noteworthy and valuable information appears in the sections of the consent order that prohibit GC from engaging in specific collection practices and in the detailed descriptions that lay out how GC must perform certain collection activities.

Debt collector to pay $700,000 in settlement with FTC

On February 14, 2017, the FTC issued a press release announcing that it had reached a settlement agreement with GC Services Limited Partnership to resolve allegations that GC used “unlawful tactics to collect on federal student loans and other debts.” Under the settlement agreement, GC will pay a $700,000 civil money penalty.

GC is a third-party debt collector that focuses on collection of federal student loans and other types of debt. GC is headquartered in Houston, Texas.

CFPB releases findings from consumer debt collection survey

The CFPB released the findings from its long-awaited national debt collection consumer survey. The survey was originally proposed on March 7, 2014, when the CFPB published a notice in the Federal Register, providing notice of its intent to conduct a “consumer” survey on debt collection and to request public comment on the survey methodology. The notice said that the “CFPB plans to conduct a mail survey of consumers to learn about their experiences interacting with the debt collection industry.” The notice also explained that the survey would ask
consumers “whether they have been contacted by debt collectors in the past, whether they recognized the debt that was being collected, and about their interactions with the debt collectors.”

CFPB enters consent order with debt collection law firm

On January 9, the CFPB entered into a consent order with an Oklahoma debt collection law firm. The Bureau alleged that Works and Lentz, Inc., a law firm that specializes in collecting medical debts, falsely represented that letters and phone calls were from attorneys even though attorneys at the firm had not sufficiently reviewed accounts prior to or during the collection process.