California’s DFPI issues subpoenas to debt collectors

California’s Department of Financial Protection and Innovation said it has issued subpoenas to a dozen debt collection companies alleging potential violations of “unlawful, unfair, deceptive or abusive” practices.

The state regulator said Tuesday that the subpoenas were based on consumer complaints and marked the first major action taken by the agency since the California Consumer Financial Protection Law went into effect on Jan. 1.

The law gave the agency expanded oversight and enforcement authority over previously unregulated industries including debt collectors, fintech firms and credit reporting agencies.

“We take our expanded responsibility very seriously and are moving swiftly to ensure debt collectors do not violate the rights of California consumers,” DFPI Commissioner Manny Alvarez said in a press release.

State and federal laws prohibit debt collectors from harassing or threatening consumers, calling at unusual times, or attempting to collect phantom debts. The subpoenas seek documents related to how the companies collect debts and communicate with consumers.

“Consumers allege that these debt collectors call repeatedly, fail to validate debts, and threaten to sue the consumers for debts they do not owe,” the DFPI said in a press release.

The agency said it issued subpoenas to Portfolio Recovery Associates, a unit of PRA Group in Norfolk, Va.; Encore Capital Group, a San Diego publicly-traded debt buyer and its subsidiaries Atlantic Credit and Finance, Midland Credit Management, and Midland Funding; Enhanced Recovery Company, a Jacksonville, Fla., debt buyer; and LVNV Funding, a Greenville, S.C., debt owner and collection affiliate Resurgent HP.

Other firms that also were sent subpoenas include the Offices of Morgan and Moss, a Newport Beach, Calif., debt collector; Convergent Outsourcing, a Renton, Wash., debt buyer and collector; Spectrum Billing Services, a Los Angeles collections arm of the cable and phone network; and Monterey Financial Services, a Monterrey, Calif., collections firm.


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