On December 7, 2015, the CFPB announced another consent order going after a firm for alleged violations the Consumer Financial Protection Act, FCRA, and FDCPA.

The CFPB alleges that Massachusetts debt collection firm Collecto, Inc. (dba EOS) paid a cell phone provider over $35 million for a portfolio of more than three million cellphone accounts, with a $2.3 billion total face value.  Despite learning of significant problems with the portfolio, including that it contained fraudulent, already settled or already paid debts, or debts too old to legally collect, the CFPB alleges that EOS continued to collect on the debts and report to consumer reporting agencies without verifying that the debts were outstanding.  The Bureau also alleges that EOS violated the FCRA because it inaccurately “reported all of the over three million accounts as disputed by the account holder, despite knowing that consumers had not disputed each of the accounts,” and then removed the dispute flags only to reinsert them a month later.

Under the consent order, EOS would provide at least $743,000 in refunds to consumers, pay $1.85 million, suspend debt collection practices unless a given debt can be verified by original account-level documentation, provide periodic compliance reports to the Bureau, and stop reselling the subject debts for five years.