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DFPI Continues Enforcement Sweep Against Unscrupulous Debt Collectors

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SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) announced today that it has issued enforcement actions against three entities for unlicensed debt collection activity under the Debt Collection Licensing Act (DCLA) and unlawful, unfair, deceptive, or abusive acts or practices in violation of the California Consumer Financial Protection Law (CCFPL). These actions are a robust continuation of the Department’s efforts to pursue unscrupulous debt collectors. The three entities that the DFPI issued actions against are:

Each entity was ordered to desist and refrain from engaging in unlawful, unfair, deceptive, or abusive acts or practices, including:

  • Engaging in debt collection in California without a license from the DFPI.
  • Making unlawful threats to sue on debts.
  • Making false claims about the alleged debt.
  • Falsely presenting themselves as attorneys or someone in the legal profession or department.
  • Making false claims of pending lawsuits or legal process.
  • Making false claims about the authority to collect a debt.
  • Attempting to collect a time-barred debt without notifying the consumer that the debt is time-barred.
  • Failing to provide a “validation notice” as required by federal law.

The DFPI ordered the subjects to pay penalties totaling $85,000 and to desist and refrain from violating consumer protection laws. These actions follow previous debt collection action sweeps issued on October 11, 2022 and  January 30, 2023, further demonstrating the DFPI’s focus on debt collectors that violate the law. Since the Debt Collection Licensing Act licensing requirements took effect in 2022, the Department has issued 17 separate actions against debt collectors, with penalties totaling $347,500.

How Consumers Can Protect Themselves

Fake debt collectors may present themselves as law firms or attorneys when they are not. Regardless, attorneys and law firms engaged in debt collection in California must have a conditional license issued by the DFPI or a pending application. The DFPI began approving conditional licenses for debt collectors on January 1, 2023. You can check to see if the alleged debt collector has a conditional license or pending application by looking on the DFPI’s debt collector lookup page.

Learn more about your rights regarding debt collectors and how to protect yourself from fake debt collectors.

The DFPI encourages consumers who have experienced unlawful, unfair, deceptive, or abusive acts or practices from a financial service provider to file a complaint with the DFPI. For additional information, contact us at Ask.DFPI@dfpi.ca.gov or call toll-free at (866) 275-2677.

About the DFPI 

The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.