Having made this mistake once before, did you know that there are two FDCPAs? Everyone reading this should be familiar with the Fair Debt Collection Practices Act. But there is another law, called the Federal Debt Collection Procedures Act, and the two statutes are markedly different? It is the second FDCPA that the Consumer Financial Protection Bureau is invoking in a lawsuit it filed yesterday in a Kansas federal court, accusing the two former owners of a payday lending business of engaging in fraudulent activities attempting to avoid paying more than $40 million in fines and penalties from a previous enforcement order.
A copy of the complaint in the case of Consumer Financial Protection Bureau v. James R. Carnes, Melissa C. Carnes, et al. can be accessed by clicking here.
You may remember this case as the one where former CFPB Director Richard Cordray rejected a ruling from one administrative law judge, asked a different judge to rule on the case, and that judge ordered the company to pay $132 million in restitution to individuals who were misled.
Back in 2015, the CFPB sued Integrity Advance and James Carnes, accusing the company of deceiving consumers about the cost of the payday loans they were obtaining and for using remotely created checks to withdraw funds from the consumers’ accounts even after the consumers revoked their permission for the withdrawals. The lawsuit resulted in fines, penalties, and restitution in excess of $50 million. The company and Carnes appealed the ruling, and the Court of Appeals for the Tenth Circuit affirmed it last September. Since then, the Carneses have not made any payments to satisfy the judgment against them, and have taken steps to “hinder, delay, or defraud” the CFPB in violation of the Federal Debt Collection Procedures Act, the CFPB alleges in its complaint.
The defendants have used revocable trusts to transfer millions of dollars while the CFPB was conducting its initial investigation.
The complaint details some of the assets being held by the defendants, including five cars that each cost more than $300,000, $1.4 million in artwork, and nearly $1 million in jewelry.
