California DFPI Sanctions Collector

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On September 22, the California Department of Financial Protection and Innovation (DFPI) filed a cease and desist order and imposed civil penalties against debt collector and debt buyer F&F Management based in California. collector for violating the recently enacted California Consumer Financial Protection Act (CCFPL).

According to the order, F&F violated California and federal law by:

  1. Debt parking, that is, providing negative credit information for consumer debt allegedly owed by consumers in multiple states without first providing consumers with 30 days notice as required by the section 1785.26 of the Civil Code, subdivisions (b) and (c) of the California Consumer Credit Reporting Agencies Act (LCRAA).
  2. Leaving an illegal voicemail message without disclosing the identity of the debt collector or basic debt information, in violation of Civil Code Section 1788.11, subdivision (b), of the Rosenthal Law of California.

In addition, the DFPI implies that F&F violated section 808 of the Fair Debt Collection Practices Act. [15 U.S.C Section 1692f] trying to collect unjustified debts and unjustified costs.

Finally, the DFPI concluded that F&F had not provided the written notice required by Article 809 of the FDCPA. [15 U.S.C 1692g] and, in some cases, continued to attempt to collect debts despite receiving letters from consumers sent by certified mail requesting validation in accordance with 1692g and, in addition, told consumers (including those who had requested validation) that their fees would multiply dramatically if they failed to pay quickly.

The DFPI imposed an administrative penalty of $ 375,000 on F&F, which F&F must pay by October 22.

“This action highlights some of the illegal and unfair acts that can cause enormous harm to consumers and plague the debt collection industry, and the ways the DFPI can address them,” said Suzanne Martindale, Deputy Commissioner DFPI’s principal of the consumer financial protection division, in a press release.

The company is obligated to cease and desist from illegal acts or practices associated with the FDCPA, the Rosenthal Fair Debt Collection Practices Act, and the CCRAA.

If there are bad actors who engage in activities that harm consumers, the ACA is eager to support all efforts to eliminate them.

Read the full DFPI order here.

California license and draft regulations

Meanwhile, the DFPI continues to seek comments on the CCFPL and the Debt Collection Licensing Act (DCLA) by October 5. ACA has already reported.

On April 8, 2021, the DFPI Commissioner launched a regulation to adopt regulations related to licensing requirements under the DCLA. The Commissioner is now considering a second regulation to adopt regulations related to other provisions of the DCLA, including its scope, annual reports and bond amounts.

The Commissioner invites interested parties to contribute to the development of regulations related to these topics and has formulated questions to help these parties provide this input. The Commissioner also invites interested parties to provide examples of language for regulations related to these subjects.

Agencies should also be aware of the new California licensing requirements under the DCLA requiring California debt collectors and buyers to apply for a DFPI license by December 31, 2021.

The license request is now available on the Nationwide Multistate Licensing System website, ACA has already reported.

The DCLA, which takes effect January 1, 2022, requires anyone engaged in debt collection activity in California to be licensed by the DFPI.

The ACA licensing team has resources to help members navigate the licensing process.


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