About Debt Purchase Companies

The latest news about debt purchase companies is not all bad. A new lawsuit against the largest company in the business has caused a backlash against them. The lawsuit filed by Encore Financial Services in June was the largest of its kind in the U.S. It paid 8.6 cents per dollar, and a typical $3,142 debt was bought for $271. The new company is now responsible for reporting information to the credit reference agencies.

The Consumer Financial Protection Bureau (CFPB) recently filed a complaint in New York federal district court against three debt purchase companies. The bureau said that Encore Capital Group and Portfolio Recovery Associates had violated the Fair Debt Collection Practices Act by purchasing potentially inaccurate debts and using robo-signed court documents to collect payment. The company will now pay up to $40 million in refunds to consumers and a $10 million penalty. It will also cease collection of over $125 million in debt.

A new report from Fitch Ratings reveals that many debt purchasing companies do not perform due diligence. As a result, many of them aren’t transparent and don’t report their use to credit bureaus. As a result, many consumers aren’t sure if they’ll be able to repay their loans on time. The latest news about debt purchase companies includes an analysis of the industry’s performance.

Latest News About Debt Purchase Companies

The largest debt purchase company in the country is Encore Capital Group. Its subsidiaries have seen soaring revenues since the company launched in 2008. Its shares are part of the NASDAQ Global Select index and is a component stock of the Wilshire 4500. The second largest debt purchase company was 235 Portfolio Recovery Associates. T. Andy Wang revealed that the company used an online database to summon debtors with the same name.

The Consumer Financial Protection Bureau has taken action against two debt purchase companies, including Encore Capital Group and Portfolio Recovery Associates. These companies purchased potentially inaccurate debts and acted without documentation, and used robo-signed court documents to collect payments. As a result, the two companies must now pay consumers up to $42 million in refunds and $10 million in penalties. Furthermore, they must stop collecting over $125 million in unpaid debt.

While some debt purchase companies may have a legitimate case, many of them do not follow the law. In the US, these companies were not required to provide accurate and comprehensive documentation to consumers. In addition, Encore Capital Group and Portfolio Recovery Associates were found to have used an online database to summon consumers with the same name. This was illegal, and the company has since ceased all contact with these clients. The company did not pay the plaintiff any fees.