On February 23, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into consent orders with a national bank, two of its affiliates, and two debt collection law firms over allegations that the debt collection law firms altered affidavits filed in New Jersey courts. The consent orders allege that the bank retained the debt collection law firms to collect credit card debts on its behalf, but the firms allegedly altered the date or amount owed after the bank had executed sworn affidavits attesting to the validity of the debts.
The consent order entered into between the CFPB and the national bank and its affiliates alleged that the altered affidavits were false representations of the amount or legal status of a debt, and constituted deceptive acts or practices in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536. However, the consent order found that in May 2011, when the bank became aware of the allegedly false affidavits, the bank stopped referring new accounts for collection to the law firms and reported its findings to the Office of the New Jersey Courts Administration. Thus, the consent order does not require the bank to pay a civil money penalty, although it does require the bank to comply with court orders requiring it to refund $11 million to affected consumers and stop collection on $34 million in debts.
The consent orders reached between the CFPB and the debt collection law firms (available here and here) alleged violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692e, through the use of false, deceptive, and misleading representations in connection with the collection of a debt, and violations of the CFPA, 12 U.S.C. §§ 5531, 5536, through the use of false representations regarding the amount or legal status of the debt. The consent orders require one firm to pay a $15,000 civil money penalty, and one firm to pay a $65,000 civil money penalty.