News : Financial Readiness

Warning Against Illegal Debt Collection Tactics

Wednesday, December 16, 2015  
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Dear Military Leaders, JAGS, and Financial Education Professionals,

The Consumer Financial Protection Bureau (CFPB) today took action against EZCORP, Inc., a small-dollar lender, for illegal debt collection practices. These tactics included illegal visits to consumers at their homes and workplaces, empty threats of legal action, lying about consumers’ rights, and exposing consumers to bank fees through unlawful electronic withdrawals. The Bureau ordered EZCORP to refund $7.5 million to 93,000 consumers, pay $3 million in penalties, and stop collection of remaining payday and installment loan debts owed by roughly 130,000 consumers. It also bars EZCORP from future in-person debt collection. In addition, the Bureau issued an industry-wide warning about collecting debt at homes or workplaces. 

Read the full press release:

Warning Against Illegal Debt Collection Tactics
The CFPB also issued a bulletin warning the financial services industry, and in particular lenders and debt collectors, about potentially unlawful conduct during in-person collections. Lenders and debt collectors risk engaging in unfair or deceptive acts and practices that violate the Dodd-Frank Act and the Fair Debt Collection Practices Act when going to consumers’ homes and workplaces to collect debt. 

The bulletin offering guidance on debt collection practices can be found here

Please disseminate this information as you deem appropriate.

Thank you,

David M. DuBois
Deputy Director
Office of Servicemember Affairs
Consumer Financial Protection Bureau

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