CFPB sues law firm that resisted consent order

The CFPB alleges that Weltman violated the Fair Debt Collection Practices Act and the Consumer Financial Protection Act in their correspondence with consumers.

The Consumer Financial Protection Bureau has filed a lawsuit against Weltman, Weinberg & Reis, a debt-collection law firm based in Ohio. The CFPB alleges that Weltman violated the Fair Debt Collection Practices Act and the Consumer Financial Protection Act in their correspondence with consumers. The suit can be found here.

The CFPB alleges that Weltman sent out computer-generated letters to consumers that gave the appearance of having been prepared by attorneys. The letters were printed on letterhead with the phrase “attorneys at law” at the top, but the suit alleges that in most cases lawyers “were not meaningfully involved.” The law firm’s collection agents also referred to Weltman as a law firm during collection calls, implying that lawyers had exercised independent professional judgment in determining that the call was warranted or that the consumer in fact owed the debt. Yet lawyers generally had not evaluated individual accounts at the time of the calls, according to the complaint.

“Debt collectors who misrepresent that a lawyer was involved in reviewing a consumer’s account are implying a level of authority and professional judgment that is just not true,” CFPB Director Richard Cordray said in a statement. The firm is responsible, he said, for “millions of debt collection letters and phone calls” that were improperly associated “with the professional standards associated with attorneys when attorneys were, in fact, not involved. Such illegal behavior will not be allowed in the debt collection market.”

Weltman managing partner Scott Weltman issued a statement claiming that the law firm has taken “every reasonable step” to make sure its statements to consumers are in compliance with federal statutes and to ensure that every statement made to consumers is accurate and not misleading.

“We fundamentally disagree with the CFPB’s allegations and believe that this lawsuit is the result of our firm’s refusal to be strong-armed into a consent order,” Weltman said. “We are a law firm that is legally allowed, under federal and state law, to provide collection and legal services. We are being truthful with consumers and factually accurate when we use our name and our company’s letterhead for proper debt collection activity.”

Weltman also noted that his firm has cooperated fully with the CFPB since it initiated its Civil Investigative Demand, and has submitted numerous phone call recordings and documents to defend itself. He stressed that “the CFPB’s two-and-a-half-year investigation into our firm did not uncover a single instance of consumer harm.”