CFPB Takes Action Against Two Debt Collection Law Firms for Intimidating Consumers with “Unfounded Threats of Potential Lawsuits”

On January 9, 2017, the Consumer Financial Protection Bureau (CFPB) took action against two law firms, and their president, for lying when collecting medical debts from thousands of patients. The Oklahoma firms (Works & Lentz) attempt collection on approximately 700,000 debts totaling more than $500 million annually.

The CFPB charged Works & Lentz with violating both the Fair Debt Collection Practices Act and the Fair Credit Reporting Act between January 2012 and August 2016, for falsely representing to consumers that collection calls were made and letters were sent from attorneys, when in fact they were not. Attorneys did not even review consumers’ accounts. Works & Lentz also did not have any protocols or procedures for ensuring the accuracy of information that was transmitted to credit reporting agencies for over one million consumers. Lastly, Works & Lentz were charged with falsely notarized affidavits. The firm then filed the false documents in court in lawsuits against consumers.

The CFPB has ordered Works & Lentz and Harry Lentz to refund $577,135 to consumers that made payments as a result of receiving letters from the firm that falsely threatened litigation, and to pay a $78,800 fine. The order also requires them to clearly and properly identify the sender of the letter or the individual making the call, and prohibits employees from illegally notarizing consumers’ affidavits.

This action is a reminder of the troubling problems in the debt collection industry, and the need for the CFPB as a consumer watchdog. According to a recent report released by the CFPB, “more than one-in-four consumers report feeling threatened by a debt collector,” underlining the importance of the Bureaus commitment to – in Director Cordray’s words “clean up abuses in [the] industry, and to see that all consumers are treated with fairness, decency, and respect.”

— Veronica Meffe