CFPB settles with Yorba Capital on notices of debt collection litigation | Man’s pepper with trout

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On April 6, the Consumer Financial Protection Bureau (CFPB) issued a consent order against California debt collector Yorba Capital Management LLC and its sole owner Daniel Portilla, Jr. for violating the Consumer Financial Protection Act and the Fair Debt Collection Practices Act. The consent ordinance permanently prohibits Yorba and Portilla from carrying out debt collection activity and orders restitution and penalties to resolve the CFPB’s findings.

The consent order says Yorba and Portilla allegedly harassed consumers from January 2017 to April 2020 by threatening them with legal action. Specifically, it states that Yorba attempted to collect debts through postal letters titled “NOTICE OF LITIGATION” which contained a case number and caption, giving the mistaken impression that Yorba had already filed a complaint. The letters read: “You are hereby informed that a recommendation to take legal action to collect this debt may be the next step leading to a judgment against you” and “to avoid further legal action, you must contact our office within 10 days of receiving this notice; if not, we will assume that you do not intend to pay this debt and litigation will be initiated immediately. The letters further cautioned that Yorba had “several methods of obtaining judgment” after judgment has been rendered, including garnishing wages, collecting bank accounts, placing liens on real or personal property, and securing wages. suspension of the consumer’s driving license. If consumers contacted Yorba, they received little information about their debts before being verbally threatened with legal action unless the debt was paid.

Unlike verbal and written warnings, the consent order states that Yorba and Portilla did not actually sue these consumers or even hire lawyers. The CFPB thus determined that the letters misled and falsely threatened to sue consumers in violation of the CFPA, 15 USC §§ 5531 (a) and 5536 (a) (1) (B), and the FDCPA, 15 USC § § 1692nd (5) and 1692nd (10).

Yorba and Portilla are now permanently banned from debt collection. The consent order includes a suspended judgment of $ 860,000 for consumer relief, which is currently suspended due to their inability to pay. They must also pay an additional civil fine of $ 2,200 to the CFPB. Yorba and Portilla agreed to the settlement without admitting or denying the CFPB’s findings in the consent order.

The most recent similar action by the CFPB against collectors using bogus threats to collect debts dates back to 2019. The CFPB partnered with the New York Attorney General to file a consent order which barred Douglas MacKinnon, Mark Gray and their companies Northern Resolution Group LLC and Delray Capital LLC from debt collection activity. This consent order said these companies and individuals were falsely threatening consumers with lawsuits they did not intend to take, falsely accusing consumers of committing crimes and falsely claiming that consumers would be arrested. , all with the aim of putting pressure on consumers to pay their debts.

The consent order against Yorba and Portilla is the first administrative settlement finalized under CFPB interim director David Uejio. We will continue to monitor and report any developments related to this matter.


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