CFPB says Chicago debt collector made bogus threats against consumers

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A Chicago-area debt collector threatened to sue and garnish the wages of consumers in violation of federal law, the Consumer Financial Protection Bureau said in a consent order.

The CFPB alleged that Asset Recovery Associates in Lombard, Ill., also threatened to place liens against consumers' homes. The debt collector was ordered to pay at least $36,800 in restitution and a $200,000 fine to the CFPB.

The debt collector made false statements and engaged in deceptive practices against consumers while attempting to collect a debt in violation of the Federal Debt Collection Practices Act, according to the agency's consent order, released Wednesday.

Despite the company's threats, “it did not intend to take such action,” the bureau said in the 28-page order.

The company, also known as Financial Credit Service Inc., also falsely told consumers that company employees were attorneys and that their credit reports would be negatively affected if they did not pay their debts, the CFPB said.

Bruce Cohen, the president of Asset Recovery, did not respond to a request for comment.

The CFPB ordered Asset Recovery to record and retain all incoming and outgoing calls with consumers and create a plan to identify all affected consumers.

Asset Recovery has a history of regulatory trouble and consumer complaints.

In 2006, Illinois Attorney General Lisa Madigan filed a lawsuit against the company and Cohen alleging the firm purchased uncollectible debts that had been discharged in bankruptcy or that were not actually owed by the consumer being contacted.

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Debt collection Enforcement actions Corporate governance CFPB Illinois