The Minnesota Department of Commerce entered a consent order on Oct. 1 with a licensed collection agency after finding the company continued collection efforts on a consumer account that the agency itself had offered to settle, the department said. The agency also reported the account to consumer reporting agencies without reflecting the settled, zero balance, according to the department’s filing.
What the order says
The department alleged the collector: (1) continued to attempt to collect an amount after the consumer paid a settlement the agency had offered; and (2) furnished incomplete or inaccurate information to credit reporting companies. Those actions, the department said, violated the federal Fair Debt Collection Practices Act (FDCPA), which bars false representations in collection, and the state’s laws governing collection agencies.
- The agency must pay a $7,500 civil penalty and $135 in investigative costs.
- The collector must cease and desist from violating laws tied to the commissioner’s authority under state collection statutes.
- The company waived its right to a hearing and consented to resolve the matter without admitting or denying the allegations.
The Minnesota Department of Commerce also said the collector breached the Fair Credit Reporting Act (FCRA) in two ways: by reporting incomplete or inaccurate account information to consumer reporting agencies — conduct the department described as “untrustworthy” — and by failing to review all relevant material the consumer included with a dispute, which the department called “incompetent.”
Enforcement details and legal effect
Under the consent order, the civil penalty may be enforced as a judgment in district court without further notice, and the penalty is non‑dischargeable in bankruptcy, the department stated. The order requires the agency to stop the practices identified in the department’s action and comply with duties imposed by state law on collection agencies.
The collector agreed to the order without admitting or denying the department’s claims, and it waived its right to a hearing to contest the allegations.
What this means for consumers
The department’s action highlights two consumer risks: that collection agencies may continue collection activity even after a settlement is reached, and that incorrect reporting by collectors can leave inaccurate negative information on credit files. Inaccurate account data furnished to credit reporting agencies can affect consumers’ credit reports and scores, which lenders and other businesses use to evaluate creditworthiness.
| Item | Amount |
|---|---|
| Civil penalty | $7,500 |
| Investigative costs | $135 |
The department’s consent order is part of its authority to regulate licensed collection agencies in Minnesota. The order does not itself create federal precedent, but it underscores how state enforcement can intersect with federal credit reporting and debt collection laws.
