Regulation and Compliance

CFPB Settles with Debt Collector for $800K

Jul 17, 2018
The Consumer Financial Protection Bureau (CFPB) reached an $800,000 settlement with National Credit Adjusters LLC (NCA) and its former CEO and part-owner, Bradley Hochstein

The Consumer Financial Protection Bureau (CFPB) reached an $800,000 settlement with National Credit Adjusters LLC (NCA) and its former CEO and part-owner, Bradley Hochstein.
 
According to the CFPB, the Hutchinson, Kan.-based company used a network of debt collection companies to collect consumer debt on NCA’s behalf, but some of these contractors engaged in unlawful debt collection acts and practices that included threats of lawsuits and arrests. NCA and Hochstein were charged with enabling these practices despite being aware that such actions were illegal.
 
The agency found that NCA and Hochstein violated the Consumer Financial Protection Act of 2010 and that NCA violated the Fair Debt Collection Practices Act. Hochstein was permanently banned from the collection industry and was fined a $300,000 civil money penalty, while NCA was fined a $500,000 civil money penalty.
 
However, a Reuters report citing “three people familiar with the decision” claimed that the settlement was significantly smaller than the enforcement action planned by CFPB under the directorship of Richard Cordray, which aimed for a $60 million settlement against NCA and Hochstein. The CFPB did not comment on whether this report was accurate.
 
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Phil Hall
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Jul 17, 2018
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