FTC to Prioritize Deceptive Debt Collection in 2018

Jim Elliot, assistant regional director for the FTC’s Southwest region, presents at AFPCS18.

Last year, the Federal Trade Commission made a point to focus on deceptive debt collection tactics across all financial products and in 2018 the agency intends to keep up the pressure, Jim Elliott, assistant regional director for the FTC’s Southwest region, said during a presentation at the Auto Finance Performance and Compliance Summit.

“We’ll continue to look for those egregious debt collection practices such as threatening with false arrests and lawsuits,” Elliott said. “We’ll continue our enforcement proceedings and bringing actions against those egregious practitioners.”

Earlier this year, the FTC and Consumer Financial Protection Bureau issued a joint report to Congress detailing each agencies actions in this arena for the prior year. The FTC resolved 10 cases against 42 defendants, obtained more than $64 million in judgments, and banned 13 companies and individuals from engaging in serious violations, he said.

Meanwhile, the CFPB  handled more than 84,000 debt collection complaints, uncovered a number of actions that examiners deemed to be in violation of the debt collection practices act through supervisory examinations, filed briefs in two cases in federal appeals courts, and resolved one enforcement action resulting in consumer relief and payments in a civil penalty.

While specific year-over-year numbers were not given, Elliott told Auto Finance News that the figures were up from 2016.

Central to these cases of deceptive acts and practices is the lender’s liability if a third-party partner is the one accused of violating the law. In those cases, Elliott affirmed the lender is on the hook for those instances and gave the example of an investigation conducted on Uber. The FTC found issue with one of the ride-hailing platform’s third-party providers, and when Uber was unwilling to give over all the information necessary, the regulator was able to snuff out the appropriate numbers and resolve the case, he said.

“We have a variety of ways of finding things out,” Elliott told attendees during a Q&A session. “Our consumer database for example also contains insider information. There are company employees that believe there is something going on … and we receive [complaints] from insides who say, ‘Here’s what’s going on, I think you should look into it.’ And sometimes we do actually look into those complaints.”

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As Assistant Editor at Auto Finance News, William specializing in compliance, operations, and subprime. As a Brooklyn implant by way of Ohio, he's happy to discuss the triumphs and pitfalls of Cleveland sports as well as the latest music trends. Former bylines include Candy & Snack Today, Inverse, and The Tennessean.

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