Department of Financial Protection and Innovation Orders Sanctions Under the Debt Collection Licensing Act

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By Alexandra Loyo

On September 22, 2021, the Department of Financial Protection and Innovation (DFPI) processed a Desist and Refrain Order and Order Assessing Penalties (Order) against the debt collector and debt buyer F&F Management (F&F). The Order marks DFPI’s first enforcement of the SB 187 (Wieckowski) (Chapter 545, Statutes of 2019) (Rosenthal Fair Debt Collection Practices Act) through the SB 908 (Wieckowski) (Chapter 163, Statutes of 2020) (Debt Collection Licensing Act), which passed into law September 2020.

According to the Order, between approximately May 2021 through August 2021, F&F placed an automated voicemail message on multiple consumers’ phone numbers, which failed to disclose F&F’s name, contact information, or basic information about the debt, in violation of Civil Code section 1788.11(b). F&F also allegedly used randomized phone numbers to place the message. In addition, DFPI states that the automated message contained multiple false representations, including that it was the last and final notice; that it was a legal proceeding; and that if the consumer did not call back or respond within 24 hours, F&F would email and fax the issue to the consumer’s current employer, file a lawsuit, and submit paperwork to the consumer’s county sheriff’s department.

DFPI further alleges that F&F did not provide written notice, as required by law, to the consumers before contacting the credit reporting agency involved in the matter. F&F’s acts are considered “debt parking,” which occurs when debt collectors produce negative credit information regarding a consumer to a credit bureau before they attempt to communicate with the consumer about the alleged debt. DFPI alleges that F&F’s actions and inactions unfairly damaged the consumers’ credit and further violated state law.

DFPI also ordered F&F to pay a penalty of $375,000.00 to the Commissioner within 30 days of the date of the Order.

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