CFPB Announces Consent Order with Debt Collector for Violations of FCRA

On November 12, 2020, Illinois-based non-bank debt collector and furnisher of consumer information, Afni, Inc. (Afni) and the Consumer Financial Protection Bureau (CFPB) entered into a Consent Order requiring that Afni take a number of affirmative actions to prevent future violations of the Fair Credit Reporting Act (FCRA) and Regulation V as well as pay a $500,000 civil money penalty for past violations of FCRA and Regulation V.  

The CFPB found that Afni - which primarily collects debts on behalf of telecommunications companies - violated several provisions of the FCRA and Regulation V by (i) furnishing inaccurate information about consumers to consumer reporting agencies (CRAs) that Afni “knew or had reasonable cause to believe was inaccurate”, (ii) failing to provide the date on which delinquency commenced to CRAs, (iii) failing to conduct reasonable investigations within the required time and failing to use human oversight of the automated software system used to perform the dispute investigations, (iv) failing to determine or provide required notice to consumers of frivolous or irrelevant disputes which did not require investigation, and (v) failing to implement reasonable policies and procedures regarding the furnishing of consumer information to consumer reporting agencies.  The CFPB also found that Afni violated the Consumer Financial Protection Act (CFTA).  While Afni entered into a Stipulation and Consent to the Issuance of a Consent Order, it did so without admission or denial of the CFPB’s findings of fact or conclusions of law as to the alleged violations of FCRA, Regulation V, or the CFTA.

Under the Consent Order, Afni is required to:

• perform, at least monthly, sample reviews of account information, including the underlying account information provided by the creditor and the process by which the reporting is converted to industry standard formats, to assess the accuracy and integrity of the information Afni furnishes;
• perform, at least monthly, sample reviews of consumer disputes and Afni’s responses to ensure that Afni’s responses comply with FCRA, Regulation V and Afni’s own policies and procedures;
• maintain “sufficient staffing, facilities, systems and information necessary to timely and accurately respond” to consumer disputes;
• retain independent consultant(s) specializing in FCRA and Regulation V compliance to conduct an independent compliance review of Afni’s policies, procedures, and training and to prepare a report which Afni will use to develop a plan to implement the proposed recommendations of the consultant;
• address on an annual basis, if not more frequently, any deficiencies with respect to its consumer reporting policies, procedures, implementation and training as identified by Afni or its independent consultant; and
• pay a $500,000 civil money penalty.

Afni is also subject to additional reporting requirements, record keeping requirements and will be subject to the Consent Order for a period of five years from the effective date of the Consent Order.  This Consent Order makes clear that the CFPB remains focused on the enforcement of the Fair Credit Reporting Act and Regulation V.