WASHINGTON— The Consumer Financial Protection Bureau (CFPB) said it has taken action against a medical debt collector, Commonwealth Financial Systems, for what it said was illegally trying to collect unverified medical debts after consumers disputed the validity of the debts.
Under the order issued today, the company will cease operations and pay a $95,000 penalty to the CFPB’s victims relief fund.
According to the CFPB, Commonwealth Financial Systems is a nonbank corporation with its principal place of business in Dickson City, Penn. Commonwealth is a third-party debt collector that specializes in the collection of past-due medical debts and furnishes information about consumer collection accounts to consumer reporting companies, the CFPB said.
“Commonwealth’s actions violated the Fair Credit Reporting Act because the company failed to conduct reasonable investigations of disputed debts and failed to inform consumer reporting companies that certain information was being disputed,” the Bureau said.
Commonwealth also violated the Fair Debt Collection Practices Act because it continued to attempt to collect disputed debts without substantiating documentation.
The Enforcement Action
The CFPB said Commonwealth must now:
- Shut down permanently. Commonwealth is banned from participating in or assisting others in any debt collection activities, debt buying, debt selling, and consumer reporting activities.
- Tell consumer reporting companies to delete all information. Commonwealth must request all consumer reporting companies to whom it previously furnished information about any consumer to delete all collection accounts for such consumers.
- Pay a $95,000 fine. Commonwealth will pay a $95,000 penalty to the CFPB’s victims relief fund.
Your Best Holiday Shopping Offer is Here!
The biggest, best and freshest news reporting in credit unions remains free! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?