Texas-based debt collection agency Credit Protection Association (CPA) is agreeing to pay a penalty and adopt new policies in order to settle charges by the Federal Trade Commission (FTC) that CPA violated the requirements of the Fair Credit Reporting Act (FCRA).

The FTC alleges that CPA violated the FCRA’s Furnisher Rule by having inadequate policies and procedures in place to handle consumer disputes over information provided by CPA to credit reporting agencies, and by failing to inform consumers about the outcome of investigations following a consumer’s dispute. The FTC alleges that CPA has written policies governing the handling of consumer disputes, but that those policies did not address the Furnisher Rule’s requirements and that CPA’s employees were not properly trained about those policies.

In addition to its allegations about CPA’s failure to properly handle consumer disputes, the FTC alleges that CPA relied on its clients to conduct investigations but failed to send dispute information to those clients in a consistent way, and that CPA had no way to audit or analyze its handling of consumer disputes.

Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, commented on the allegations by saying that “when consumers dispute potentially incorrect information in their credit reports, companies must not only investigate those disputes, but also let consumers know whether the information has been corrected…companies that fail to live up to these obligations can expect to hear from the FTC.”

The settlement requires CPA to pay a civil penalty of $72,000 and implement policies and procedures that fully comply with the requirements of the FCRA and the Furnisher Rule, including all requirements related to conducting dispute investigations and informing consumers about the outcome of such investigations.

The CPA settlement is part of the federal government’s “Operation Collection Protection” initiative targeting debt collectors engaging in allegedly illegal practices.


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