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The Consumer Financial Protection Bureau is considering new rules to govern debt collection practices that could for the first time include banks and other creditors that are collecting their own debt.
November 6 -
Wells Fargo has temporarily stopped selling defaulted consumer debts to collections agencies. Its move follows a more drastic pullback by JPMorgan Chase and a regulatory crackdown on the collections industry.
July 28 -
The CFPB is taking aggressive action against the debt collection industry, emphasizing it plans to hold banks responsible for third-party actions.
July 12 -
JPMorgan Chase has stopped selling most of its bad loans to third-party collectors in recent months as it braces for regulatory action over its credit card debt collections practices.
July 1
Three collection companies used forged Wells Fargo (WFC) and U.S. Bank (USB) documents to recoup debts from defaulted borrowers, according to a complaint filed by Colorado Attorney General John Suthers.
United Credit Recovery, a collection agency in Florida that bought charged-off debt from the two banks, created hundreds of thousands of fake affidavits and other documents in their names, according to
The complaint also names GTF Services, a collection agency that bought debt from United Credit, and Standley & Associates, a debt-collection law firm that allegedly filed the forged documents in hundreds of lawsuits to recover delinquent accounts.
GTF and Standley & Associates declined to comment. United Credit could not immediately be reached for comment.
Colorado sued the three companies, as well as the owner of United Credit, to force them to pay damages and restitution to harmed borrowers and to pay the state all profits from any illegal activities, plus court and attorney costs.
The lawsuit
Debt-sale agreements often require the transfer of only minimal documentation attesting to the validity and accuracy of the accounts sold. In this case, United Credit is accused of forging the supporting documents it needed to collect on accounts.
United Credit purchased about $857 million in unpaid principal from U.S. Bank between 2007 and 2011, and $289 million from Wells Fargo in 2010 and 2011, largely in the form of overdrawn checking accounts, but it did not receive supporting documents as part of the purchase, the complaint says. After the sale the banks periodically provided United Credit with supporting documents, for a fee, as the debt-sale agreements stipulate. The collection agency then allegedly used the legitimate documents to create fakes, including certifications of having been signed by bank officers before a notary public.
Large banks have lately been coming under fire for their debt-collection practices, including the sale of charged-off accounts to debt buyers. Wells Fargo
The Consumer Financial Protection Bureau said in July that it would
