Collector - May 2020 - 23

disputes, the manufactured lawsuits filed and
the number of robo-disputes sent.
Last year the ARM industry celebrated
a legislative victory on this front when
The CBE Group Inc. and RGS Financial
Inc. secured a jury verdict against credit
repair companies Lexington Law Firm and
Progrexion Inc. The federal class-action
lawsuit identified several causes of action,
but most importantly claims of fraud and
fraud by nondisclosure, which highlight the
intricacies of the defendants' "credit repair"
business and the damage it causes.
Unfortunately, in February 2020 a district
court judge overturned that verdict. The
CBE Group and RGS Financial are currently
appealing the decision.
Still, the original lawsuit filed by Malone
Frost Martin PLLC is just the beginning of
exposure to the fraudulent practices carried
out by CROs. Several other lawsuits with
similar allegations have been filed against
these groups.

GRAPPLING WITH: DISPUTE
HANDLING PROCESSES
Another common pitfall is the "reasonable
investigation" required for disputes.
Generally, the FCRA and Regulation V
require furnishers to conduct a reasonable
investigation if a consumer directly disputes
certain information contained in a consumer
report. The CFPB notes that whether an
investigation is considered "reasonable"
depends on the circumstances, but should
include reviewing "all relevant information
forwarded by the CRA and the furnisher's
own information with respect to the dispute."
Many collection agency furnishers
find it difficult to evaluate disputes and
communications that do not specify
consumers' concerns or any factual basis for
raising a concern about a trade line that has
been credit reported.
This challenge was highlighted in
September 2019 when the CFPB filed its
lawsuit against FCO Holding Inc., in which
the bureau alleged the company and its
subsidiaries failed to conduct reasonable
investigations of certain consumer disputes,
among other issues.

COLLECTOR 05.20

What will YOU do for the

ACA International Education Foundation needs
your help! June is Collectors Challenge month.
Money raised through your company fundraisers benefits
the Foundation's scholarships and helps raise
awareness of our industry's great work.

Please join us.
The challenge is on!
Download a FREE planning kit at
www.acainternational.org/about/collectors-challenge.
For more information, email
foundation@acainternational.org.

23


http://www.acainternational.org/about/collectors-challenge

Collector - May 2020

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