On Thursday, the Consumer Financial Protection Bureau (CFPB or Bureau) announced that it settled with Afni, Inc., a debt collector, for credit reporting practices. The settlement includes the imposition of $500,000 fines, in addition to certain compliance requirements on Afni's part.

According to the the Bureau's press release: 

The Bureau found that Afni furnished information to CRAs that it knew or had reasonable cause to believe was inaccurate and failed to report to CRAs an appropriate date of first delinquency on certain accounts. The Bureau also found that Afni failed to conduct reasonable investigations of disputes made by consumers both to Afni and to CRAs about furnished information and failed to conduct investigations of disputes made to Afni in a timely manner. In addition, the Bureau found that Anfi failed to send required notices to consumers about the results of such investigations and failed to establish, implement, and update its policies and procedures regarding its furnishing of consumer information to CRAs. 

insideARM reached out to Afni, which provided the following statement:

Prior to entering into a consent order with the CFPB, Afni continually invested in the maintenance and enhancement of our compliance management system. The Consent Order requirements restate remediation which Afni has already pursued after continued cooperation with the CFPB throughout the investigative process. To minimize disruption to our business operations, Afni has chosen to efficiently settle this matter and will focus our efforts on continual improvement of our compliance management system and pursuit of our mission to enable better outcomes through positive and worthwhile engagement with our customers.

The consent order, which can be found here, provides further details of the Bureau's allegations.


The consent order alleged that Afni's automated system that uses furnishing logic when reporting accounts to the credit bureau incorrectly translated account files. This translation resulted in 165,000 accounts reported with zero dollars for payments even though the consumers actually paid and 72,000 accounts reported with current balances and amounts past due even though those accounts were settled in full.

The consent order also alleges that Afni failed to properly report the date of first delinquency on an unspecified number of accounts. 

Regarding credit reporting disputes and investigations, the consent order alleges several things. First, that the company did not have enough information to timely complete the dispute, relied on the incomplete information in its files rather than reaching out to the creditor for further investigation. Second, when the company received direct disputes, the Bureau alleges that it did not distinguish between FCRA and FDCPA disputes.

insideARM Perspective

Two things come to mind with the news of this consent order.

First, it's been speculated for some time that the Bureau is focusing on credit reporting. Not only has credit reporting raked in the top spot for consumer complaints for a couple of years now, but credit reporting has also been the subject of other Bureau activities such as its Supervisory Highlights. Especially as consumers still struggle through the pandemic, the CFPB found that credit reporting complaints are also top dog among complaints that reference coronavirus keywords. If your organization furnishes data to the credit bureaus, it's a good time to give a solid review of your policies and procedures on credit reporting to ensure that they comply with the FCRA as well as the requirements of the CARES Act.

Second, considering what happened when a debt collection law firm fought—and won—a CFPB enforcement action, it's no surprise that a company would choose to settle rather than fight the fight. Remember, folks, a settlement is not an admission—nor is it a finding by a judge or jury—that a violation occurred. It's extremely expensive to defend against these allegations, even if there is ultimately no violation found. Considering what happened with Weltman, Weinberg, & Reis (WWR) back in 2018, it's no wonder a debt collector would choose to settle.

As a refresher, WWR successfully defended itself against the CFPB's enforcement action related to this issue back in mid-2018. The win was a landslide: not only did the jury find in WWR's favor, so did the judge in a separate decision. Despite winning the matter, WWR incurred $1.2MM in legal fees and roughly $67,000 in costs to defend against the enforcement action and to handle the pre-litigtion investigation. Even though there was no finding of a violation, the judge refused to allow WWR to recover any of the fees, and only partially allowed the firm to recover roughly $11,000 in costs. 

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