Consumer Financial Protection Bureau sues debt collector BounceBack, Inc.
Today, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against BounceBack, Inc. for allegedly engaging in deceptive and otherwise unlawful debt collection acts or practices. BounceBack, based in Kansas City, Missouri, operates bad-check pretrial-diversion programs on behalf of more than 90 district attorneys’ offices throughout the United States. The Bureau alleges that in the course of implementing this program, BounceBack violated the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act of 2010 (CFPA). The Bureau’s complaint seeks injunctions against BounceBack, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of a civil money penalty.
The Bureau filed its complaint in federal court in the Western District of Missouri. The complaint alleges that since at least 2015, in the course of administering these bad-check pretrial-diversion programs, BounceBack used district-attorney letterheads to threaten more than 19,000 consumers with prosecution if they did not pay the amount of the check, enroll and pay for a financial-education course, and pay various other fees. BounceBack did not reveal to consumers that BounceBack—and not district attorneys—sent the letters. Nor did BounceBack reveal that district attorneys almost never prosecuted these cases, even when consumers ignored BounceBack’s threats. In fact, in most cases, BounceBack did not refer cases for prosecution, even if the check writer failed to respond to its collection letter. BounceBack’s letters also failed to include disclosures required under the FDCPA. The Bureau alleges that BounceBack’s conduct violated the FDCPA, was deceptive under both the FDCPA and the CFPA, and that its violations of the FDCPA constituted violations of the CFPA.
The complaint is not a finding or ruling that the defendant has violated the law.
A copy of the complaint is available at: https://files.consumerfinance.