Consumer debt has become big business, and debt collectors are increasingly the subject of AG prosecutions.
Over the last decade, private equity firms have built up significant stakes in payday lenders and other subprime consumer lenders. The private equity-backed debt buying business has boomed. And consumer debt has reached an all-time high. Against this backdrop, a number of notable AG prosecutions have been brought against debt collectors.
The National Consumer Law Center just awarded its "Rising Star" award for 2018 to two Texas AAG's who won a $25 million penalty and injunction against a major debt collector. The case was litigated for four years, and the penalty was imposed by a jury following a two-week trial.
The NY AG and the FTC teamed up and just recently won a federal temporary restraining order against a NY-based debt collector. The order included an asset-freeze over all of the defendants’ assets.
A search through AG actions in this area shows that debt collectors are under scrutiny by AGs, the FTC and advocacy organizations. Consumers continue to be plagued by abusive debt collection practices, and more enforcement by state AGs is undoubtedly on the horizon.