Fishers-based collection agency ordered to pay $1.68M penalty

The Consumer Financial Protection Bureau has ordered Fishers-based medical debt collector Phoenix Financial Services LLC to pay a $1.68 million penalty, plus refunds to affected consumers, over alleged violations of federal debt-collection and credit-reporting laws.

In a consent order issued Thursday, the CFPB said that, “in at least thousands of instances,” Phoenix sent debt collection letters to consumers who had disputed the validity or accuracy of the debt without sufficiently investigating whether the consumers actually owed the debt. Those actions violated the Fair Debt Collection Practices Act, the CFPB alleges.

The CFPB also alleges that Phoenix furnished information about the disputed debts to credit agencies such as Equifax, Experian and TransUnion. That was a violation of the Fair Credit Reporting Act, the CFPB said.

A phone message left with Phoenix on Monday morning was not immediately returned.

In a press release, the CFPB said, “Phoenix’s failure to conduct reasonable investigations of disputes likely resulted in many inaccuracies remaining on consumers’ credit reports, and harmed consumers in a number of ways, such as making credit more expensive or inaccessible.”

Under the terms of consent order, Phoenix must pay a $1.68 million penalty to the CFPB and refund any amounts that consumers paid to Phoenix after receiving a collection letter for an unverified debt since January 2017.

Phoenix must also establish and implement written policies about how it handles consumer disputes, and to ensure that it conducts “reasonable investigations” of disputes over information that it shares with credit agencies, the CFPB said.

The CFPB will conduct supervisory reviews of Phoenix for the duration of the five-year consent order to make sure Phoenix is in compliance.