On April 25, the Consumer Financial Protection Bureau entered into consent orders with the debt collection law firm Pressler & Pressler, LLC, two principal partners, and New Century Financial Services, Inc., a debt buyer, for the defendants' alleged violations of the Fair Debt Collection Practices Act. The consent orders require Pressler and the named partners to pay $1 million, and New Century to pay $1.5 million, to the Bureau's Civil Penalty Fund.
As we previously reported, Pressler was named in an individual complaint in New Jersey federal court arising from the company's attempt to collect on the plaintiff's credit card debt. In that case, the plaintiff alleged that Pressler filed a debt collection complaint against him without meaningful review by an attorney. Specifically, the plaintiff alleged that an attorney from Pressler only reviewed plaintiff's file for four seconds before filing the complaint.
The CFPB's allegations against Pressler and New Century similarly alleged that Pressler spent less than a few minutes reviewing each debt collection case before initiating a lawsuit. More specifically, the CFPB claimed that the companies made false or empty allegations about consumer debts, filed lawsuits based on unreliable or false information, and harassed consumers with unsubstantiated court filings.
In addition to the monetary penalties, the consent orders require Pressler and New Century to ensure accurate future court filings and to review specific account-level documents and information showing that the debt is accurate and enforceable.
In a press release, CFPB Director Richard Cordray stated, "Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse."
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