The Consumer Financial Protection Bureau (CFPB) has taken decisive action against Commonwealth Financial Systems, a medical debt collection agency, ordering it to shut down and imposing a $95,000 fine for multiple legal violations related to unverified medical debts.
Key Takeaways
- Commonwealth Financial Systems has been ordered to cease all operations.
- The agency must pay a $95,000 fine to the CFPB’s victims relief fund.
- Commonwealth is required to request the deletion of all consumer collection accounts from reporting agencies.
Violations and Penalties
The CFPB found that Commonwealth Financial Systems violated several laws in its debt collection practices. These violations include:
- Failing to conduct reasonable investigations after consumers disputed debts.
- Not informing consumer reporting agencies about disputes.
- Continuing to attempt to collect disputed debts without proper documentation.
As a result, the CFPB has mandated the following actions:
- Permanent Shutdown: Commonwealth is banned from participating in any debt collection activities, including debt buying, selling, and consumer reporting.
- Deletion of Consumer Information: The agency must request that all consumer reporting agencies delete any collection accounts related to its activities.
- Financial Penalty: Commonwealth must pay a $95,000 fine into the CFPB’s victims relief fund.
Broader Implications
This action against Commonwealth is part of a broader effort by the CFPB to regulate and enforce fair practices in the financial sector. In the past two months, the CFPB has also shut down Prehired, an online vocational training firm, for illegal student lending practices. Prehired was ordered to provide over $30 million in relief to affected borrowers.
CFPB Director Rohit Chopra emphasized the importance of these actions in protecting consumers from deceptive practices. The agency encourages individuals to submit complaints about financial products or services, which are then reviewed and addressed accordingly.
How to Submit Complaints
The CFPB provides a platform for consumers to submit complaints about financial products or services. These complaints are sent to companies for response, and if another agency is better suited to assist, the CFPB will forward the complaints accordingly.
Consumers can submit complaints through the CFPB’s website or by calling their hotline.
Related Actions
The CFPB has been active in enforcing regulations across various sectors. Recent actions include:
- Fining Bank of America $12 million for reporting false mortgage data.
- Imposing a $60 million fine on Toyota’s financing arm for multiple violations.
- Taking action against credit repair companies for deceptive practices.
- Suing Snap Finance and Prehired for allegedly deceiving consumers.
These actions reflect the CFPB’s commitment to ensuring fair practices and protecting consumers in the financial marketplace.
