CFPB Announces Settlement with Massachusetts Collection Agency

The Consumer Financial Protection Bureau (CFPB) announced yesterday that a Massachusetts-based debt collection firm agreed to pay at least $2.5 million to settle CFPB claims that it collected debts that it had purchased without verifying their accuracy and gave inaccurate information to consumer credit reporting firms.

The federal complaint and settlement agreement involves Collecto, Inc. d/b/a EOS CCA (EOS), a Massachusetts debt collection firm.  EOS is a debt collection company headquartered in Norwell, Massachusetts, that also has a debt-purchasing arm. The enforcement action and settlement agreement involves a specific purchase of a portfolio of more than three million cellphone accounts with a total face value of $2.3 billion. The accounts were purchased in 2012. Many of these debts were older accounts that had been previously sent to multiple collection agencies.

The proposed consent order, if and when approved by the court, would require EOS to overhaul its debt collection practices, refund at least $743,000 to consumers, and pay a $1.85 million civil money penalty.

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