The Consumer Financial Protection Bureau has settled with Asset Recovery Associates, Inc., a debt-collection company headquartered in Illinois, over allegations it falsely threatened consumers.
According to the consent order, the bureau found that ARA violated the Fair Debt Collection Practices Act by threatening to sue or arrest consumers and to garnish consumers’ wages or place liens on their homes even though it did not intend to do so since at least January 1, 2015.
The company also falsely represented to consumers that company employees were attorneys and that consumers’ credit reports would be negatively affected if they did not pay, even though ARA does not report consumer debts to credit-reporting agencies during that time.
The bureau found that these false statements were also deceptive, in violation of the Consumer Financial Protection Act of 2010.
Under the terms of the consent order, ARA will pay at least $36,800 in restitution to affected consumers and a $200,000 civil money penalty to the bureau. The consent order also prohibits ARA from continuing to engage in this conduct and requires ARA to record calls with consumers to help ensure collectors do not make false statements in the future.
ARA, also known as Financial Credit Service, Inc., collects debts from consumers throughout the United States.