Date: 01-10-2017

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Judge: None

Court: Washington, D.C.

Plaintiff's Attorney: Not Available

Defendant's Attorney: Not Available

Description: Tulsa, OK - Oklahoma-based medical debt collection law firms will pay over $650K in restitution and penalties for alleged improper debt collection actions.

The Consumer Financial Protection Bureau Monday announced its latest enforcement action against Works and Lentz, Inc. and Works and Lentz of Tulsa, Inc., two Oklahoma law firms that specialize in medical debt, along with Harry A. Lentz, Jr., their president.

In a statement ACA International obtained from the law firms and their president, they said, “While Works & Lentz does not believe it has violated any laws and has not admitted any liability, Works & Lentz has determined that it was in its best interest to resolve the matter with the CFPB. Litigation with the CFPB would have been costly, lengthy, and risky due to Congress’ granting the CFPB the authority to seek millions of dollars in fines, which it threatened to do here. The CFPB reviewed every aspect of Works & Lentz’s business for nearly a year, and found no abusive conduct by Works & Lentz, nor did it find any efforts to collect amounts that were not due. Instead, its allegations almost entirely related to the format of certain communications and disclosures, as well as the written policies it believes that federal regulations require. The firm implemented many of these changes some time ago, and looks forward to putting this matter behind it in the spirit of compliance.”

According to the consent order, the CFPB claimed that the law firms violated the Fair Debt Collection Practices Act and the Fair Credit Reporting Act from January 2012 to August 2016. Specifically, the CFPB asserted that during this period the law firms engaged in the following activities deemed to be unfair and deceptive practices to collect delinquent medical bills owed by consumers.

Implied lawyers were reviewing the veracity of a consumer’s medical debt collection account when no lawyer had, in fact, reviewed the file. The CFPB alleged that the law firms’ attorneys were not meaningfully involved in evaluating consumer debt collection accounts before they sent collection letters or made collection calls to consumers. And, instead, the law firms falsely represented that their debt collection demand letters were from an attorney or that the firms’ attorneys were meaningfully involved in reviewing the consumer’s case before the law firms’ non-attorneys sent a demand letter or made a collection call.

Falsified notarization of affidavits in lawsuits against consumers. The CFPB claimed that the law firms did not properly verify the truth of the signature on affidavits prior to notarizing the affidavits and filing them in collection lawsuits against consumers.

Furnished information to a credit reporting company without policies to ensure accuracy. The CFPB charged the law firms with failing to maintain any written policies and procedures regarding the accuracy and integrity of information relating to consumers that it furnishes to consumer reporting agencies.

In addition to paying a refund to harmed consumers and paying a civil money penalty to the CFPB’s Civil Penalty Fund, the consent order requires the law firms to:

Clearly and prominently disclose that no attorney has reviewed consumer accounts in all letters and calls to consumers where attorneys have not previously reviewed the account. The law firms must also accurately identify the identity or the job title of the person sending the collection letter or making the collection call. And, the law firms much remove the name of any attorney and the phrase “Attorney at Law” from the signature block of any collection demand letter.

Stop presenting to a court any affidavit in which the affiant represents that the affidavit has been notarized if the affidavit was not executed by the affiant in the presence of a notary.

Revise and enhance their written policies and procedures regarding the accuracy and integrity of information relating to consumers that it furnishes to consumer reporting agencies.

As with any consent order, the Works and Lentz consent order is only binding on the Works and Lentz law firms’ and their president. However, it does contain guidance for all law firms that collect consumer debt. It is likely that aspects of this consent order, like others, will make their way into the debt collection rules expected from the CFPB.

The Works and Lentz consent order confirms a key directive from the CFPB – that attorneys retain final approval and ultimate oversight of all processes followed by their staff. While attorneys do not have to personally perform every step involved in the collection and prosecution of their cases, this consent order makes clear that they must be involved in every key decision arising from their cases.

Outcome: In the consent order dated January 4, 2017, the CFPB assessed a $78,800 fine against the law firms and required the law firms to pay an additional $577,135 to consumers who were allegedly harmed for misrepresenting the level of attorney involvement in the debt collection process, using improperly notarized affidavits in lawsuits filed against consumers, and failing to ensure the accuracy of the consumer information they furnished to credit reporting agencies.

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