Encore Enters Settlement Agreement with CFPB – Company Position

SAN DIEGO — Encore Capital Group, Inc. (Encore), an international specialty finance company (NASDAQ: ECPG), today announced it has entered into a settlement agreement with the Consumer Financial Protection Bureau (CFPB). The settlement includes a civil payment and consumer refunds connected to two isolated issues, which are not current practice and were changed some time ago.

“After rigorously and thoroughly scrutinizing seemingly countless aspects of our business for more than a year, the CFPB ultimately identified only two key issues warranting consumer refunds,” said Kenneth A. Vecchione, President and Chief Executive Officer. “While we disagree with the CFPB’s positions on these two issues, we chose to agree to a settlement so we can move forward. We also believe the CFPB is imposing yet-to-be-adopted rules to past practices. This outcome is not about current law or rules already on the books, but instead about the CFPB subjecting companies to its own interpretations that have never been codified or adopted.”

The consumer refunds in the settlement are tied to alleged issues regarding time-barred debt and dispute language in litigation. On the issue of time-barred debt, the CFPB said that when Encore sent letters that mentioned a “settlement” opportunity for the consumer (which typically included a debt forgiveness component), specifically using the word “settlement” implied that litigation was being threatened. Encore supports the disclosure of time-barred debt even though a number of courts have found there is no requirement to do so under governing law.

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