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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MISSOURI

FEDERAL TRADE COMMISSION, 

Plaintiff,

v. 

MIDWEST RECOVERY SYSTEMS, LLC, 

a limited liability company, 

BRANDON M. TUMBER, individually and as an 

officer of Midwest Recovery Systems, LLC,

KENNY W. CONWAY, individually and as an 

officer of Midwest Recovery Systems, LLC, and

JOSEPH H. SMITH, individually and as an officer 

of Midwest Recovery Systems, LLC

Defendants.

Case No. 4:20-cv-01674

STIPULATED ORDER FOR 

PERMANENT INJUNCTION AND 

MONETARY JUDGMENT

Plaintiff, the Federal Trade Commission (“Commission”), filed its Complaint for 

Permanent Injunction and Other Equitable Relief (“Complaint”), for a permanent injunction and 

other equitable relief in this matter, pursuant to Sections 13(b) and 19 of the Federal Trade 

Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, Section 814 of the Fair Debt 

Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692l; and Section 621(a) of the Fair Credit 

Reporting Act (“FCRA”), 15 U.S.C. § 1681s(a). The Commission and Defendants stipulate to 

the entry of this Order for Permanent Injunction and Monetary Judgment (“Order”) to resolve all 

matters in dispute in this action between them.

THEREFORE, IT IS ORDERED as follows:

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FINDINGS

1. This Court has jurisdiction over this matter.

2. The Complaint charges that Defendants participated in deceptive acts or practices in 

violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and violations of the FDCPA, 15 U.S.C. §§ 

l692-l692p, the FCRA, 15 U.S.C. §§ 1681-1681x, and Regulation V, Subpart E—Duties of 

Furnishers of Information (“Furnisher Rule”), 12 C.F.R. §§ 1022.40-1022.43, issued pursuant to 

Section 623(e)(1) of the FCRA, 15 U.S.C. § 1681s-2(e)(1), in the collection of Consumer Debts. 

3. Defendants neither admit nor deny any of the allegations in the Complaint, except as 

specifically stated in this Order. Only for purposes of this action, Defendants admit the facts 

necessary to establish jurisdiction. 

4. Defendants waive any claim that they may have under the Equal Access to Justice Act, 28 

U.S.C. § 2412, concerning the prosecution of this action through the date of this Order, and agree 

to bear their own costs and attorney fees.

5. Defendants waive all rights to appeal or otherwise challenge or contest the validity of this 

Order.

6. Entry of this Order is in the public interest.

DEFINITIONS

For the purpose of this Order, the following definitions apply: 

A. “Defendants” means the Corporate Defendant and the Individual Defendants, 

individually, collectively, or in any combination. 

1. “Corporate Defendant” means Midwest Recovery Systems, LLC and its 

successors and assigns.

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2. “Individual Defendants” means Brandon M. Tumber, Kenny W. Conway, and 

Joseph H. Smith, individually, collectively, or in any combination. 

B. “Debt” means any obligation or alleged obligation to pay money arising out of a 

transaction, whether or not such obligation has been reduced to judgment. 

C. “Debt Collection Activities” means any activities of a Debt Collector to collect or attempt 

to collect, directly or indirectly, a Debt owed or due, or asserted to be owed or due. 

D. “Debt Collector” means any person who uses any instrumentality of interstate commerce 

or the mail in any business the principal purpose of which is the collection of any Debts, 

or who regularly collects or attempts to collect, directly or indirectly, Debts owed or due 

or asserted to be owed or due another. The term also includes any creditor who, in the 

process of collecting its own Debts, uses any name other than its own which would 

indicate that a third person is collecting or attempting to collect such Debts. The term 

also includes any person to the extent such person collects or attempts to collect any Debt 

that was in default at the time it was obtained by such person. 

E. “Debt Portfolio” means spreadsheets, databases, tables, lists, or any other compilation of 

information describing Debts or purported Debts owed by individuals to a business.

F. The definitions set forth in the FCRA, 15 U.S.C. § 1681a, et seq., and 12 C.F.R. §§ 1022.3 

and 1022.41 shall apply, including but not limited to: 

1. “Consumer” means an individual. 

2. “Consumer Reporting Agency” or “CRA” means any person which, for 

monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in 

whole or in part in the practice of assembling or evaluating Consumer credit 

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information or other information on Consumers for the purpose of furnishing 

consumer reports to third parties, and which uses any means or facility of interstate 

commerce for the purpose of preparing or furnishing consumer reports. 

3. “Direct Dispute” means a dispute submitted directly to a Furnisher (including a 

Furnisher that is a Debt Collector) by a Consumer concerning the accuracy of any 

information contained in a consumer report and pertaining to an account or other 

relationship that the Furnisher has or had with the Consumer. 

4. “Furnisher” means an entity that furnishes information relating to Consumers to 

one or more Consumer Reporting Agencies for inclusion in a consumer report. 

G. “FCRA Qualified Direct Dispute” means a written Direct Dispute that is submitted by 

the Consumer at the address provided by the Furnisher or, if the Furnisher has not 

specified an address, is submitted to any business address of the Furnisher and: (1) 

includes sufficient information to identify the account or other relationship that is in 

dispute; (2) includes the specific information the Consumer is disputing and an 

explanation for the basis of the dispute; and (3) includes all supporting documentation or 

other information reasonably required by the Furnisher to substantiate the basis of the 

dispute. 

H. “Investigation,” for purposes of this Order, includes objectively evaluating the 

circumstances and considering information, including an assessment of the relevance, 

reliability, accuracy, integrity, and completeness of such information, to determine 

whether a Consumer owes a Debt in the amount asserted by Defendants while collecting 

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on Debt. The information Defendants shall assess in an Investigation, where applicable, 

shall include but not be limited to: 

1. the information that Defendants received, directly or indirectly, from the credit 

originator or the creditor to whom the Debt is owed, such as: (a) the Consumer’s 

credit application, (b) the credit contract between the Consumer and the credit 

originator, (c) documents with the current or former name, address, and telephone 

phone number of the Consumer, (d) documents with the Consumer’s account 

number, in whole or in part, and account statements, (e) documents with the date 

and amount of any payments, (f) documents with the date and outstanding balance 

at charge-off, and (g) Debt Collector’s notes; 

2. the information that Defendants received from data aggregators, data brokers, 

Consumer Reporting Agencies, skip tracers, and other third-parties, such as: (a) 

documents with the current or former name, address, and telephone number of the 

Consumer, (b) documents with consumer report information, including credit 

scores and updates to the information in credit reports, and (c) the scoring of the 

Debt through the use of a predictive model; and

3. the information that Defendants created or maintained in collecting on the Debt, 

such as Debt Collectors’ notes; and the information Defendants received from the 

Consumer denying, disputing, or challenging the claim that the Consumer owes the 

Debt or the amount of the Debt such as: (a) documents with the Consumer’s 

current or former name, address, and telephone number, (b) receipts or other 

evidence of payment from the credit originator, the creditor to whom the Debt is 

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owed, or a Debt Collector, (c) canceled checks, bank account statements. credit 

card statements. and other documents evidencing payment, and (d) a consumer 

report relevant to the disputed item. 

ORDER

I. PROHIBITION AGAINST FURNISHING CREDIT INFORMATION PRIOR TO 

COMMUNICATION WITH CONSUMER 

IT IS ORDERED that the Defendants, Defendants’ officers, agents, employees, and 

attorneys, and all other persons in active concert or participation with any of them, who receive 

actual notice of this Order, whether acting directly or indirectly, are permanently restrained and 

enjoined from furnishing information regarding a Debt to any Consumer Reporting Agency

before communicating with the Consumer about the Debt and providing the Consumer with: 

A. The amount of the Debt; 

B. The name of the creditor to whom the Debt is owed; 

C. A statement that unless the Consumer, within thirty days after receipt of the notice, 

disputes the validity of the Debt, or any portion thereof, the Debt will be assumed 

to be valid by the Debt Collector; 

D. A statement that if the Consumer notifies the Debt Collector in writing within the 

thirty-day period that the Debt, or any portion thereof, is disputed, the Debt 

Collector will obtain verification of the Debt or a copy of a judgment against the 

Consumer and a copy of such verification or judgment will be mailed to the 

Consumer by the Debt Collector; 

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E. A statement that, upon the Consumer’s written request within the thirty-day period, 

the Debt Collector will provide the Consumer with the name and address of the 

original creditor, if different from the current creditor; 

F. Verification of the Debt if the Consumer notifies the Debt Collector in writing 

within the thirty-day period that the Debt, or any portion thereof, is disputed; and

G. The name and address of the original creditor, if different from the current creditor, 

if the Consumer makes a written request within the thirty-day period. 

II. DELETION OF CONSUMER DEBTS

IT IS FURTHER ORDERED that, for any Debt that Defendants reported or caused to be 

reported to a CRA prior to entry of this Order, the Corporate Defendant and Individual Defendant 

Brandon M. Tumber shall, within ten (10) days of entry of this Order, request that each CRA 

delete such Debt from the consumer’s credit reporting file.

III. PROHIBITION AGAINST UNLAWFUL DEBT COLLECTION PRACTICES

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees, 

and attorneys, and all persons or entities in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with any 

Debt Collection Activities, are permanently restrained and enjoined from: 

A. Using any false, deceptive, or misleading representation or means, including, but 

not limited to, falsely representing, directly or indirectly, expressly or by

implication:

1. the character, amount, or legal status of any Debt;

2. that a Consumer is delinquent on a Debt;

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3. that Defendants have the authority to collect any Debt; 

4. that the Consumer has a legal obligation to pay Defendants; 

5. that the law allows them to contact third parties without limitation; or

6. any other material fact; 

B. Using any unfair or unconscionable means to collect or attempt to collect any 

Debt, including collecting Debts that were counterfeit or from unauthorized loans; 

C. Failing to provide Consumers, either in an initial communication or a written 

notice sent within five days after the initial communication, with: 

1. the amount of the Debt; 

2. the name of the creditor to whom the Debt is owed; 

3. a statement that unless the Consumer, within thirty days after receipt of the 

notice, disputes the validity of the Debt, or any portion thereof, the Debt 

will be assumed to be valid by the Debt Collector; 

4. a statement that if the Consumer notifies the Debt Collector in writing 

within the thirty-day period that the Debt, or any portion thereof, is 

disputed, the Debt Collector will obtain verification of the Debt or a copy 

of a judgment against the Consumer and such verification or judgment will 

be mailed to the Consumer by the Debt Collector; and 

5. a statement that, upon the Consumer’s written request within the thirty-day 

period, the Debt Collector will provide the Consumer with the name and 

address of the original creditor, if different from the current creditor; and

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D. Violating any provision of the FDCPA, 15 U.S.C. §§ 1692-1692p (a copy of which

is attached hereto as Attachment A), including, but not limited to, Sections 

807-809, 15 U.S.C. §§ 1692e-1692g. 

IV. PROHIBITION AGAINST MISREPRESENTATIONS REGARDING ANY GOOD 

OR SERVICE

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees, 

and attorneys, and all other persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

promoting or offering for sale any good or service, are permanently restrained and enjoined from 

misrepresenting, or assisting others in misrepresenting, expressly or by implication:

A. That a Consumer has a legal obligation to pay Defendants; 

B. Credit information, including by communicating to any person credit information 

which is known or which should be known to be false; or 

C. Any other fact material to Consumers concerning any good or service, such as: 

the total costs; any material restrictions, limitations, or conditions; or any material 

aspect of its performance, efficacy, nature, or central characteristics.

V. PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees, 

and attorneys, and all persons or entities in active concert or participation with any of them, who

receive actual notice of this Order, whether acting directly or indirectly, in connection with Debt 

Collection Activities, are permanently restrained and enjoined from:

A. Representing, expressly or by implication, that a Consumer owes a Debt, that

Defendants have authority to collect on a Debt, or the amount of a Debt, when, at 

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the time of the representation, Defendants do not possess and rely upon competent 

and reliable evidence that is sufficient to substantiate that the representation is true, 

including but not limited to instances where:

1. Consumers have disputed or attempted to dispute the validity or accuracy of 

the Debt and Defendants have failed to review information substantiating 

the amount of Debt, or failed to consider the Consumers’ disputes, prior to 

continuing collection; or 

2. Defendants have knowledge or reason to believe that a specific Debt 

Portfolio contains unreliable data but fail to obtain information 

substantiating the accuracy of the data prior to collecting; and

B. Failing, after a Consumer denies, disputes, or challenges the Defendants’ claim that 

the Consumer owes the Debt or owes the Debt in the amount asserted, to:

1. within thirty (30) days after the denial, dispute, or challenge, or when the 

Debt is next reported to a Consumer Reporting Agency, if earlier: report the 

Debt as disputed or request deletion of that item from the Consumer’s

consumer reporting file by any Consumer Reporting Agency to which the 

Debt was reported by Defendants; and

2. promptly after the denial, dispute, or challenge:

(a) cease collection, and not sell, provide, or transfer the Debt to any

Person or entity other than the creditor to whom the Debt is owed;

or 

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(b) commence and complete, within thirty (30) days after a Consumer

denies, disputes, or challenges Defendants’ claim that the Consumer

owes the Debt or that it owes the Debt in the amount asserted, an

Investigation of the denial, dispute, or challenge, provided that 

Defendants shall not be required to investigate any denial, dispute,

or challenge more than once unless the Consumer provides to 

Defendants or the Defendants otherwise acquire or obtain 

information, data, or documentation that was not considered in any

prior Investigation. Defendants shall notify the Consumer within

five (5) business days if the denial, dispute, or challenge is not 

investigated under this proviso.

(i) If the results of the Investigation show that the Consumer 

owes the Debt in the amount asserted, Defendants shall, 

within seven (7) days of reaching their conclusion: (a) 

inform the Consumer, either directly or, if the denial, 

dispute, or challenge was received solely by notification 

from a Consumer Reporting Agency, by informing the 

Consumer Reporting Agency, of Defendants’ conclusion, 

and provide the basis for it; and (b) unless the denial, 

dispute, or challenge was received solely by notification 

from a Consumer Reporting Agency, provide verification of 

the Debt to the Consumer; after which they may continue 

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collection. If the Consumer continues to dispute the Debt,

nothing in this order supersedes the requirement of 

§ 623(a)(3) of the FCRA, 15 U.S.C. § 1681s-2(a)(3), that

Defendants convey the dispute when furnishing information 

on the Debt to any Consumer Reporting Agency.

(ii) If the results of the Investigation show that the Consumer 

does not owe the Debt or the Debt cannot be verified,

Defendants shall, within seven (7) days of reaching their

conclusion: (a) inform the Consumer, either directly or, if 

the denial, dispute, or challenge was received solely by 

notification from a Consumer Reporting Agency, by 

informing the Consumer Reporting Agency, of Defendants’ 

conclusion and the basis for it; (b) request that each 

Consumer Reporting Agency to which the Debt has been 

reported delete the Debt from the Consumer’s consumer

reporting file; (c) cease collection; and (d) not sell, provide, 

or transfer the Debt to any Person or entity other than the 

creditor to whom the Debt is allegedly owed. 

(iii) If the results of the Investigation show that the Consumer 

does owe the Debt but not in the amount that Defendants

asserted, Defendants shall, within seven (7) days of reaching

their conclusion: (a) inform the Consumer, either directly or, 

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if the denial, dispute, or challenge was received solely by 

notification from a Consumer Reporting Agency, by 

informing the Consumer Reporting Agency, of Defendants’ 

conclusion and the basis for it; and (b) provide to each

Consumer Reporting Agency to which the Debt has been

reported any correction to the reported information that is 

necessary to make the information provided by Defendants

accurate, after which they may continue collection.

Provided that, if the Consumer initiates contact with Defendants by any means, 

Defendants may respond to the Consumer prior to the completion of the Investigation. 

Provided further that, nothing in this Section affects Defendants’ obligation to comply 

with all applicable provisions of the FDCPA and the FCRA.

Provided further that, nothing in this Section prohibits Defendants from requiring 

Consumers who deny, dispute, or challenge a Debt on the grounds of fraud or identity theft to do 

so in writing, so long as Defendants clearly and conspicuously disclose these requirements to 

Consumers. Once Defendant receives an identity theft report, the requirements of § 623(a)(6)(B) 

of the FCRA, 15 U.S.C. § 1681s-2(a)(6)(B), apply.

VI. PROHIBITION ON DISCLOSURE OF INACCURATE CONSUMER 

INFORMATION

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees, 

and attorneys, and all other persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

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promoting or offering for sale any good or service, are permanently restrained and enjoined from 

furnishing information regarding a Consumer to any Consumer Reporting Agency, 

notwithstanding any alternative compliance methods that may be generally available under 

Section 623(a)(1)(C) of the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(a)(1)(C), while 

knowing or having reason to believe that the information is inaccurate. 

VII. PROHIBITION ON VIOLATIONS OF FURNISHER RULE

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees, 

and attorneys, and all other persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

promoting or offering for sale any good or service, are hereby permanently restrained and 

enjoined from: 

A. Failing to comply with 12 C.F.R. § 1022.42, a copy of which is attached as 

Attachment B, including by failing to: 

1. Establish and implement reasonable written policies and procedures 

regarding the accuracy and integrity of the information relating to 

Consumers that it furnishes to CRAs that are appropriate to the nature, size, 

complexity, and scope of Defendant’s activities; 

2. Consider the guidelines set forth in Appendix E to 12 C.F.R. Part 1022, a 

copy of which is attached as Attachment C, in developing the policies and 

procedures, and incorporate those guidelines that are appropriate; and 

3. Periodically review the written policies and procedures and update them as 

necessary to ensure their continued effectiveness; 

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B. Failing to: 

1. Establish and implement reasonable written policies and procedures 

regarding reasonable investigations of FCRA Qualified Direct Disputes; 

2. In developing the policies and procedures concerning FCRA Qualified 

Direct Disputes, incorporate reasonable provisions related to: (a) training 

employees whose duties include processing, responding to, or investigating 

Direct Disputes, including training on the requirements of the FCRA and 

related regulations; (b) retaining documents related to FCRA Qualified 

Direct Disputes for a reasonable period of time to allow for effective 

training and auditing; (c) requiring employees to document actions taken in 

processing, responding to, or investigating FCRA Qualified Direct 

Disputes, to allow for effective training and auditing; and (d) establishing 

an auditing program and schedule that is reasonably designed to promote 

compliance with the requirements of the FCRA and related regulations; and 

3. Periodically review the written policies and procedures regarding the 

conduct of reasonable investigations of FCRA Qualified Direct Disputes 

and update them as necessary to ensure their continued effectiveness; 

C. Failing to comply with 12 C.F.R. § 1022.43, a copy of which is attached as 

Attachment D, including by, upon receiving an FCRA Qualified Direct Dispute, 

failing to: 

1. Conduct a reasonable investigation with respect to the disputed 

information; 

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2. Review all relevant information provided by the Consumer with the dispute 

notice; and 

3. Complete its investigation of the dispute and report the results of the 

investigation to the Consumer before the expiration of the period 

prescribed by Section 611(a)(1) of the Fair Credit Reporting Act, 15 U.S.C 

1681i(a)(1), a copy of which is attached as Attachment E. 

VIII. MONETARY JUDGMENT FOR EQUITABLE MONETARY RELIEF

IT IS FURTHER ORDERED that: 

A. Judgment in the amount of Twenty-Four Million Three Hundred Thousand Dollars 

($24,300,000) is entered in favor of the Commission against Defendants, jointly 

and severally, as equitable monetary relief.

B. Individual Defendants are ordered to assign to the Commission all right, title, and 

interest in any claim or right they may have to receive payments pursuant to their 

respective Member Separation and Asset Purchase Payout Agreements with 

Midwest Recovery Systems, LLC, dated on or about August 26, 2019 in the case 

of Defendants Kenny W. Conway and Joseph H. Smith, and dated on or about 

August 30, 2019 in the case of Defendant Brandon M. Tumber, including any 

amendments, replacements, or substitute agreements. Individual Defendants shall 

cooperate fully in such assignment and shall promptly execute all documents and 

take all actions necessary or appropriate to effect the assignment of any claim or 

right they may have to receive such payments. Only the amount of any funds 

actually received by the Commission pursuant to such assignment will be applied 

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to the unsuspended judgment amount specified in Subsection A above. Upon 

such assignments, the remainder of the judgment is suspended as to Individual 

Defendants Kenny W. Conway and Joseph H. Smith, subject to the Subsections 

below. 

C. Individual Defendant Brandon M. Tumber and the Corporate Defendant are ordered 

to pay to the Commission Fifty-Six Thousand, Seven Hundred Forty-Eight Dollars 

($56,748). Such payment must be made within forty-five (45) days of entry of this 

Order by electronic fund transfer in accordance with instructions previously 

provided by a representative of the Commission.

D. Individual Defendant Brandon M. Tumber is ordered, within twenty-one (21) days

of entry of this Order, to sell or divest his ownership interest in Consumer

Adjustment Company, Inc., also d/b/a CACi, and shall transfer to the Commission

all funds from the proceeds of such sale or divestiture within thirty (30) days of

entry of this Order. The sale or divestiture shall not be to any member of

Individual Defendant Brandon M. Tumber’s immediate family, and he shall not

otherwise materially benefit from such sale or divestiture.

E. In partial satisfaction of the judgment, U.S. Bank shall, within ten (10) business

days of receipt of a copy of this Order, transfer to the Commission all funds, if any,

in all accounts held in the name of, on behalf of, or for the benefit of, the Corporate 

Defendant, including, but not limited to account number xxxxxxxx4997 in the 

name of Midwest Recovery Systems LLC. 

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F. Upon the completion of the assignments, payments, and transfers as set forth in 

Subsections B-E above, the remainder of the judgment is suspended as to the 

Corporate Defendant and Individual Defendant Brandon M. Tumber, subject to the 

Subsections below. 

G. The Commission’s agreement to the suspension of part of the judgment is 

expressly premised upon the truthfulness, accuracy, and completeness of 

Defendants’ sworn financial statements and related documents (collectively, 

“financial representations”) submitted to the Commission, namely: 

1. the Financial Statement of Individual Defendant Brandon M. Tumber 

signed on July 26, 2020, including the attachments; 

2. the Financial Statement of Individual Defendant Brandon M. Tumber 

signed on September 11, 2020, including the attachments;

3. the Financial Statement of Corporate Defendant Midwest Recovery 

Systems, LLC signed by Brandon M. Tumber, President, on July 20, 

including the attachments; 

4. the Financial Statement of Corporate Defendant Midwest Recovery 

Systems, LLC signed by Brandon M. Tumber, President, on September 10, 

2020, including the attachments; 

5. the Financial Statement of Defendant Kenny W. Conway signed on July 

30, 2020, including the attachments; 

6. the Financial Statement of Defendant Joseph H. Smith signed on July 27, 

2020, including the attachments; 

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7. the letter from John H. Bedard, Jr., counsel for Defendants Midwest 

Recovery Systems, LLC and Brandon M. Tumber, to Commission counsel 

Daniel Dwyer dated July 27, 2020; 

8. the letter from John H. Bedard, Jr., counsel for Defendants Midwest 

Recovery Systems, LLC and Brandon M. Tumber, to Commission counsel 

Daniel Dwyer dated September 21; and 

9. the Member Separation and Asset Purchase Payout Agreement of 

Defendant Joseph H. Smith, submitted to Commission counsel Daniel 

Dwyer on September 4, 2020. 

H. The suspension of the judgment will be lifted as to any Defendant if, upon motion 

by the Commission, the Court finds that Defendant failed to disclose any material 

asset, materially misstated the value of any asset, or made any other material 

misstatement or omission in the financial representations identified above.

I. If the suspension of the judgment is lifted, the judgment becomes immediately due 

as to that Defendant in the amount specified in Subsection A above (which the 

parties stipulate only for purposes of this Section represents the consumer injury 

alleged in the Complaint), less any payment previously made pursuant to this 

Section, plus interest computed from the date of entry of this Order.

IX. ADDITIONAL MONETARY PROVISIONS 

IT IS FURTHER ORDERED that:

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A. Defendants relinquish dominion and all legal and equitable right, title, and interest 

in all assets transferred pursuant to this Order and may not seek the return of any 

assets.

B. The facts alleged in the Complaint will be taken as true, without further proof, in 

any subsequent civil litigation by or on behalf of the Commission, including in a 

proceeding to enforce its rights to any payment or monetary judgment pursuant to 

this Order, such as a nondischargeability complaint in any bankruptcy case. 

C. The facts alleged in the Complaint establish all elements necessary to sustain an 

action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy 

Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect 

for such purposes. 

D. Defendants acknowledge that their Taxpayer Identification Numbers (Social 

Security Numbers or Employer Identification Numbers), which Defendants must 

submit to the Commission, may be used for collecting and reporting on any 

delinquent amount arising out of this Order, in accordance with 31 U.S.C. §7701. 

E. All money paid to the Commission pursuant to this Order may be deposited into a 

fund administered by the Commission or its designee to be used for equitable 

relief, including consumer redress and any attendant expenses for the 

administration of any redress fund. If a representative of the Commission decides 

that direct redress to consumers is wholly or partially impracticable or money 

remains after redress is completed, the Commission may apply any remaining 

money for such other equitable relief (including consumer information remedies) 

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as it determines to be reasonably related to Defendants’ practices alleged in the 

Complaint. Any money not used for such equitable relief is to be deposited to the 

U.S. Treasury as disgorgement. Defendants have no right to challenge any 

actions the Commission or its representatives may take pursuant to this Subsection. 

X. CUSTOMER INFORMATION

IT IS FURTHER ORDERED that the Corporate Defendant, its officers, agents, 

employees, and attorneys, and all persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, and the Individual 

Defendants, whether acting directly or indirectly, are permanently restrained and enjoined from 

directly or indirectly failing to provide sufficient customer information to enable the Commission 

to efficiently administer consumer redress. If a representative of the Commission requests in 

writing any information related to redress, Defendants must provide it, in the form prescribed by 

the Commission, within 14 days. 

Provided, however, that customer information need not be disposed of, and may be 

disclosed, to the extent requested by a government agency or required by law, regulation, or court 

order. 

XI. COOPERATION

IT IS FURTHER ORDERED that Defendants must fully cooperate with representatives of 

the Commission in this case and in any investigation related to or associated with the transactions 

or the occurrences that are the subject of the Complaint. Defendants must provide truthful and 

complete information, evidence, and testimony. Individual Defendants must appear and 

Corporate Defendant must cause Corporate Defendant’s officers, employees, representatives, or 

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Page 22 of 30

agents to appear for interviews, discovery, hearings, trials, and any other proceedings that a 

Commission representative may reasonably request upon 5 days written notice, or other 

reasonable notice, at such places and times as a Commission representative may designate, 

without the service of a subpoena. 

XII. ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this 

Order:

A. Each Defendant, within 7 days of entry of this Order, must submit to the 

Commission an acknowledgment of receipt of this Order sworn under penalty of 

perjury. 

B. For 5 years after entry of this Order, each Individual Defendant for any business 

that such Defendant, individually or collectively with any other Defendants, is the 

majority owner or controls directly or indirectly, and each Corporate Defendant, 

must deliver a copy of this Order to: (1) all principals, officers, directors, and 

LLC managers and members; (2) all employees having managerial responsibilities 

for Debt Collection Activities and furnishing information to Consumer Reporting 

Agencies and all agents and representatives who participate in Debt Collection 

Activities and furnishing information to Consumer Reporting Agencies; and (3) 

any business entity resulting from any change in structure as set forth in the 

Section titled Compliance Reporting. Delivery must occur within 7 days of entry 

of this Order for current personnel. For all others, delivery must occur before they 

assume their responsibilities.

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Page 23 of 30

C. From each individual or entity to which a Defendant delivered a copy of this 

Order, that Defendant must obtain, within 30 days, a signed and dated 

acknowledgment of receipt of this Order. 

XIII. COMPLIANCE REPORTING

IT IS FURTHER ORDERED that Defendants make timely submissions to the 

Commission:

A. One year after entry of this Order, each Defendant must submit a compliance 

report, sworn under penalty of perjury: 

1. Each Defendant must: (a) identify the primary physical, postal, and email 

address and telephone number, as designated points of contact, which 

representatives of the Commission may use to communicate with 

Defendant; (b) identify all of that Defendant’s businesses by all of their 

names, telephone numbers, and physical, postal, email, and Internet 

addresses; (c) describe the activities of each business, including the goods 

and services offered, the means of advertising, marketing, and sales, and 

the involvement of any other Defendant (which Individual Defendants must 

describe if they know or should know due to their own involvement); 

(d) describe in detail whether and how that Defendant is in compliance 

with each Section of this Order; and (e) provide a copy of each Order 

Acknowledgment obtained pursuant to this Order, unless previously 

submitted to the Commission. 

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Page 24 of 30

2. Additionally, each Individual Defendant must: (a) identify all telephone 

numbers and all physical, postal, email and Internet addresses, including all 

residences; (b) identify all business activities, including any business for 

which such Defendant performs services whether as an employee or 

otherwise and any entity in which such Defendant has any ownership 

interest; and (c) describe in detail such Defendant’s involvement in each 

such business, including title, role, responsibilities, participation, authority, 

control, and any ownership. 

B. For 10 years after entry of this Order, each Defendant must submit a compliance 

notice, sworn under penalty of perjury, within 14 days of any change in the 

following: 

1. Each Defendant must report any change in: (a) any designated point of 

contact; or (b) the structure of any Corporate Defendant or any entity that 

any Defendant has any ownership interest in or controls directly or 

indirectly that may affect compliance obligations arising under this Order, 

including: creation, merger, sale, or dissolution of the entity or any 

subsidiary, parent, or affiliate that engages in any acts or practices subject 

to this Order. 

2. Additionally, each Individual Defendant must report any change in: (a) 

name, including aliases or fictitious name, or residence address; or (b) title 

or role in any business activity, including any business for which such 

Defendant performs services whether as an employee or otherwise and any 

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Page 25 of 30

entity in which such Defendant has any ownership interest, and identify the 

name, physical address, and any Internet address of the business or entity. 

C. Each Defendant must submit to the Commission notice of the filing of any 

bankruptcy petition, insolvency proceeding, or similar proceeding by or against 

such Defendant within 14 days of its filing. 

D. Any submission to the Commission required by this Order to be sworn under 

penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, 

such as by concluding: “I declare under penalty of perjury under the laws of the 

United States of America that the foregoing is true and correct. Executed on: 

_____” and supplying the date, signatory’s full name, title (if applicable), and 

signature.

E. Unless otherwise directed by a Commission representative in writing, all 

submissions to the Commission pursuant to this Order must be emailed to 

DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: 

Associate Director for Enforcement, Bureau of Consumer Protection, Federal 

Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. 

The subject line must begin: Federal Trade Commission v. Midwest Recovery 

LLC.

XIV. RECORDKEEPING

IT IS FURTHER ORDERED that Defendants must create certain records for 10 years 

after entry of the Order, and retain each such record for 5 years. Specifically, Corporate 

Defendant, in connection with Debt Collection Activities, and each Individual Defendant for any 

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Page 26 of 30

business that such Defendant, individually or collectively with any other Defendants, is a majority 

owner or controls directly or indirectly, must create and retain the following records: 

A. accounting records showing the revenues from all goods or services sold; 

B. personnel records showing, for each person providing services, whether as an 

employee or otherwise, that person’s: name; addresses; telephone numbers; job 

title or position; dates of service; and (if applicable) the reason for termination; 

C. records of all Consumer complaints and refund requests, whether received directly 

or indirectly, such as through a third party, and any response; and 

D. all records necessary to demonstrate full compliance with each provision of this 

Order, including all submissions to the Commission. 

XV. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants’ compliance 

with this Order and any failure to transfer any assets as required by this Order:

A. Within 14 days of receipt of a written request from a representative of the 

Commission, each Defendant must: submit additional compliance reports or other 

requested information, which must be sworn under penalty of perjury; appear for 

depositions; and produce documents for inspection and copying. The 

Commission is also authorized to obtain discovery, without further leave of court, 

using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30 

(including telephonic depositions), 31, 33, 34, 36, 45, and 69, provided that 

Defendants, after attempting to resolve a dispute without court action and for good 

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Page 27 of 30

cause shown, may file a motion with this Court seeking an order for one or more of 

the protections set forth in Rule 26(c). 

B. For matters concerning this Order, the Commission is authorized to communicate 

directly with each Defendant. Defendants must permit representatives of the 

Commission to interview any employee or other person affiliated with any 

Defendant who has agreed to such an interview. The person interviewed may 

have counsel present.

C. The Commission may use all other lawful means, including posing, through its 

representatives as Consumers, suppliers, or other individuals or entities, to 

Defendants or any individual or entity affiliated with Defendants, without the 

necessity of identification or prior notice. Nothing in this Order limits the 

Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of 

the FTC Act, 15 U.S.C. §§ 49, 57b-1. 

D. Upon written request from a representative of the Commission, any Consumer 

Reporting Agency must furnish consumer reports concerning Individual 

Defendants, pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. 

§1681b(a)(1). 

XVI. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for purposes 

of construction, modification, and enforcement of this Order. 

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Page 28 of 30

SO ORDERED this day of , 2020. 

_______________________________ 

UNITED STATES DISTRICT JUDGE

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Page 29 of 30

SO STIPULATED AND AGREED:

FOR PLAINTIFF: 

FEDERAL TRADE COMMISSION

/s/ Daniel Dwyer

Daniel Dwyer, Attorney #286701(CA)

Christopher Leach, Attorney 

Katherine White, Attorney

Federal Trade Commission

Washington, DC 20580 

202-326-2957 (Dwyer)

202-326-2394 (Leach)

202-326-2878 (White)

202-326-3768 (fax)

ddwyer@ftc.gov; cleach@ftc.gov; kwhite@ftc.gov

FOR DEFENDANTS MIDWEST RECOVERY SYSTEMS LLC AND BRANDON M.

TUMBER:

Date:

John H. Bedard, Jr.

Georgia Bar No: 043473

Bedard Law Group, P.C.

4855 River Green Pkwy #310 

Duluth, GA 30096 

678-253-1871

jbedard@bedardlawgroup.com

COUNSEL for Defendants Midwest Recovery Systems, LLC and Brandon M. Tumber 

Case: 4:20-cv-01674 Doc. #: 2 Filed: 11/25/20 Page: 29 of 51 PageID #: 61
Page 30 of 30

DEFENDANTS: 

______________________________________ Date: __________

BRANDON M. TUMBER, individually and 

as an officer of Midwest Recovery Systems, LLC

______________________________________ Date: __________

KENNY W. CONWAY, individually and 

as an officer of Midwest Recovery Systems, LLC

______________________________________ Date: __________

JOSEPH H. SMITH, individually and 

as an officer of Midwest Recovery Systems, LLC

10.03.2020

Case: 4:20-cv-01674 Doc. #: 2 Filed: 11/25/20 Page: 30 of 51 PageID #: 62
DEFENDANTS: 

Date: 

BRANDON M. TUMBER, individually and 

as an officer of Midwest Recovery Systems, LLC 

Date ~:;J6 

y 

Date/# 

and 

teer of Mid west Recovery S ystcms, LLC 

Page 30 of 30 

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ATTACHMENT A 

Case: 4:20-cv-01674 Doc. #: 2 Filed: 11/25/20 Page: 32 of 51 PageID #: 64
§ 1692 TITLE 15—COMMERCE AND TRADE Page 1520 

(Pub. L. 90–321, title VII, §707, as added Pub. L. (Pub. L. 90–321, title VIII, §802, as added Pub. L. 

94–239, §7, Mar. 23, 1976, 90 Stat. 255; amended 95–109, Sept. 20, 1977, 91 Stat. 874.) 

Pub. L. 96–221, title VI, §610(c), Mar. 31, 1980, 94 EFFECTIVE DATE Stat. 174; Pub. L. 111–203, title X, §1085(1), July 

21, 2010, 124 Stat. 2083.) Pub. L. 90–321, title VIII, §819, formerly §818, as added 

by Pub. L. 95–109, Sept. 20, 1977, 91 Stat. 883, §818; reAMENDMENTS numbered §819, Pub. L. 109–351, title VIII, §801(a)(1), 

Oct. 13, 2006, 120 Stat. 2004, provided that: ‘‘This title 2010—Pub. L. 111–203 substituted ‘‘Bureau’’ for 

[enacting this subchapter] takes effect upon the expira- ‘‘Board’’ wherever appearing. tion of six months after the date of its enactment 1980—Pub. L. 96–221 substituted ‘‘Each year’’ for ‘‘Not [Sept. 20, 1977], but section 809 [section 1692g of this later than February 1 of each year after 1976’’. title] shall apply only with respect to debts for which 

EFFECTIVE DATE OF 2010 AMENDMENT the initial attempt to collect occurs after such effective date.’’ Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. SHORT TITLE

111–203, set out as a note under section 552a of Title 5, 

Government Organization and Employees. This subchapter known as the ‘‘Fair Debt Collection 

Practices Act’’, see Short Title note set out under secEFFECTIVE DATE OF 1980 AMENDMENT tion 1601 of this title. 

Amendment by Pub. L. 96–221 effective on expiration § 1692a. Definitions of two years and six months after Mar. 31, 1980, with all 

regulations, forms, and clauses required to be pre- As used in this subchapter— 

scribed to be promulgated at least one year prior to (1) The term ‘‘Bureau’’ means the Bureau of such effective date, and allowing any creditor to com- Consumer Financial Protection. ply with any amendments, in accordance with the regu- (2) The term ‘‘communication’’ means the lations, forms, and clauses prescribed by the Board conveying of information regarding a debt di- prior to such effective date, see section 625 of Pub. L. 

96–221, set out as a note under section 1602 of this title. rectly or indirectly to any person through any 

medium. 

EFFECTIVE DATE (3) The term ‘‘consumer’’ means any natural 

Section effective Mar. 23, 1976, see section 708 of Pub. person obligated or allegedly obligated to pay 

L. 90–321, set out as a note under section 1691 of this any debt. 

title. (4) The term ‘‘creditor’’ means any person 

who offers or extends credit creating a debt or SUBCHAPTER V—DEBT COLLECTION to whom a debt is owed, but such term does PRACTICES not include any person to the extent that he 

§ 1692. Congressional findings and declaration of receives an assignment or transfer of a debt in 

purpose default solely for the purpose of facilitating 

(a) Abusive practices collection of such debt for another. 

(5) The term ‘‘debt’’ means any obligation or 

There is abundant evidence of the use of abu- alleged obligation of a consumer to pay money 

sive, deceptive, and unfair debt collection prac- arising out of a transaction in which the 

tices by many debt collectors. Abusive debt col- money, property, insurance, or services which 

lection practices contribute to the number of are the subject of the transaction are pripersonal bankruptcies, to marital instability, to marily for personal, family, or household purthe loss of jobs, and to invasions of individual poses, whether or not such obligation has been 

privacy. reduced to judgment. 

(b) Inadequacy of laws (6) The term ‘‘debt collector’’ means any 

person who uses any instrumentality of inter- Existing laws and procedures for redressing state commerce or the mails in any business these injuries are inadequate to protect consum- the principal purpose of which is the collec- ers. tion of any debts, or who regularly collects or (c) Available non-abusive collection methods attempts to collect, directly or indirectly, 

Means other than misrepresentation or other debts owed or due or asserted to be owed or 

abusive debt collection practices are available due another. Notwithstanding the exclusion 

for the effective collection of debts. provided by clause (F) of the last sentence of 

(d) Interstate commerce this paragraph, the term includes any creditor 

who, in the process of collecting his own debts, Abusive debt collection practices are carried uses any name other than his own which on to a substantial extent in interstate commerce and through means and instrumentalities would indicate that a third person is collecting or attempting to collect such debts. For of such commerce. Even where abusive debt col- the purpose of section 1692f(6) of this title, lection practices are purely intrastate in char- such term also includes any person who uses acter, they nevertheless directly affect inter- any instrumentality of interstate commerce state commerce. or the mails in any business the principal pur- (e) Purposes pose of which is the enforcement of security 

It is the purpose of this subchapter to elimi- interests. The term does not include— 

nate abusive debt collection practices by debt (A) any officer or employee of a creditor 

collectors, to insure that those debt collectors while, in the name of the creditor, collecting 

who refrain from using abusive debt collection debts for such creditor; 

practices are not competitively disadvantaged, (B) any person while acting as a debt coland to promote consistent State action to pro- lector for another person, both of whom are 

tect consumers against debt collection abuses. related by common ownership or affiliated 

Case: 4:20-cv-01674 Doc. #: 2 Filed: 11/25/20 Page: 33 of 51 PageID #: 65
Page 1521 TITLE 15—COMMERCE AND TRADE § 1692c 

by corporate control, if the person acting as of acquiring location information about the cona debt collector does so only for persons to sumer shall— 

whom it is so related or affiliated and if the (1) identify himself, state that he is confirmprincipal business of such person is not the ing or correcting location information concollection of debts; cerning the consumer, and, only if expressly 

(C) any officer or employee of the United requested, identify his employer; 

States or any State to the extent that col- (2) not state that such consumer owes any 

lecting or attempting to collect any debt is debt; 

in the performance of his official duties; (3) not communicate with any such person 

(D) any person while serving or attempting more than once unless requested to do so by 

to serve legal process on any other person in such person or unless the debt collector reaconnection with the judicial enforcement of sonably believes that the earlier response of 

any debt; such person is erroneous or incomplete and (E) any nonprofit organization which, at that such person now has correct or complete the request of consumers, performs bona fide location information; consumer credit counseling and assists con- (4) not communicate by post card; sumers in the liquidation of their debts by (5) not use any language or symbol on any receiving payments from such consumers envelope or in the contents of any communica- and distributing such amounts to creditors; tion effected by the mails or telegram that in- and dicates that the debt collector is in the debt 

(F) any person collecting or attempting to collection business or that the communication 

collect any debt owed or due or asserted to relates to the collection of a debt; and be owed or due another to the extent such (6) after the debt collector knows the con- activity (i) is incidental to a bona fide fidu- sumer is represented by an attorney with re- ciary obligation or a bona fide escrow ar- gard to the subject debt and has knowledge of, rangement; (ii) concerns a debt which was or can readily ascertain, such attorney’s name originated by such person; (iii) concerns a and address, not communicate with any person debt which was not in default at the time it other than that attorney, unless the attorney was obtained by such person; or (iv) concerns fails to respond within a reasonable period of a debt obtained by such person as a secured time to communication from the debt collecparty in a commercial credit transaction in- tor. volving the creditor. 

(Pub. L. 90–321, title VIII, §804, as added Pub. L. (7) The term ‘‘location information’’ means 95–109, Sept. 20, 1977, 91 Stat. 876.) a consumer’s place of abode and his telephone 

number at such place, or his place of employ- EFFECTIVE DATE

ment. Section effective upon the expiration of six months (8) The term ‘‘State’’ means any State, terri- after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as tory, or possession of the United States, the added by Pub. L. 95–109, set out as a note under section 

District of Columbia, the Commonwealth of 1692 of this title. 

Puerto Rico, or any political subdivision of 

any of the foregoing. § 1692c. Communication in connection with debt 

collection (Pub. L. 90–321, title VIII, §803, as added Pub. L. 

95–109, Sept. 20, 1977, 91 Stat. 875; amended Pub. (a) Communication with the consumer generally 

L. 99–361, July 9, 1986, 100 Stat. 768; Pub. L. Without the prior consent of the consumer 111–203, title X, §1089(2), July 21, 2010, 124 Stat. given directly to the debt collector or the ex- 2092.) press permission of a court of competent jurisAMENDMENTS diction, a debt collector may not communicate 

with a consumer in connection with the collec- 2010—Par. (1). Pub. L. 111–203 added par. (1) and struck 

out former par. (1) which read as follows: ‘‘The term tion of any debt— 

‘Commission’ means the Federal Trade Commission.’’ (1) at any unusual time or place or a time or 

1986—Par. (6). Pub. L. 99–361 in provision preceding cl. place known or which should be known to be 

(A) substituted ‘‘clause (F)’’ for ‘‘clause (G)’’, struck inconvenient to the consumer. In the absence 

out cl. (F) which excluded any attorney-at-law collect- of knowledge of circumstances to the con- ing a debt as an attorney on behalf of and in the name trary, a debt collector shall assume that the of a client from term ‘‘debt collector’’, and redesig- convenient time for communicating with a nated cl. (G) as (F). consumer is after 8 o’clock antemeridian and 

EFFECTIVE DATE OF 2010 AMENDMENT before 9 o’clock postmeridian, local time at 

Amendment by Pub. L. 111–203 effective on the des- the consumer’s location; 

ignated transfer date, see section 1100H of Pub. L. (2) if the debt collector knows the consumer 

111–203, set out as a note under section 552a of Title 5, is represented by an attorney with respect to Government Organization and Employees. such debt and has knowledge of, or can readily 

EFFECTIVE DATE ascertain, such attorney’s name and address, 

Section effective upon the expiration of six months unless the attorney fails to respond within a 

after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as reasonable period of time to a communication 

added by Pub. L. 95–109, set out as a note under section from the debt collector or unless the attorney 

1692 of this title. consents to direct communication with the 

consumer; or § 1692b. Acquisition of location information (3) at the consumer’s place of employment if 

Any debt collector communicating with any the debt collector knows or has reason to 

person other than the consumer for the purpose know that the consumer’s employer prohibits 

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§ 1692d TITLE 15—COMMERCE AND TRADE Page 1522 

the consumer from receiving such communica- (4) The advertisement for sale of any debt to 

tion. coerce payment of the debt. 

(b) Communication with third parties (5) Causing a telephone to ring or engaging 

any person in telephone conversation repeat- Except as provided in section 1692b of this edly or continuously with intent to annoy, title, without the prior consent of the consumer abuse, or harass any person at the called num- given directly to the debt collector, or the ex- ber. press permission of a court of competent juris- (6) Except as provided in section 1692b of this diction, or as reasonably necessary to effectuate title, the placement of telephone calls without a postjudgment judicial remedy, a debt collector 

may not communicate, in connection with the meaningful disclosure of the caller’s identity. 

collection of any debt, with any person other (Pub. L. 90–321, title VIII, §806, as added Pub. L. 

than the consumer, his attorney, a consumer re- 95–109, Sept. 20, 1977, 91 Stat. 877.) 

porting agency if otherwise permitted by law, REFERENCES IN TEXT the creditor, the attorney of the creditor, or the 

attorney of the debt collector. Section 1681b(3) of this title, referred to in par. (3), 

(c) Ceasing communication was redesignated section 1681b(a)(3) of this title by Pub. 

L. 104–208, div. A, title II, §2403(a)(1), Sept. 30, 1996, 110 

If a consumer notifies a debt collector in writ- Stat. 3009–430. 

ing that the consumer refuses to pay a debt or EFFECTIVE DATE that the consumer wishes the debt collector to 

cease further communication with the con- Section effective upon the expiration of six months 

sumer, the debt collector shall not communicate after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as 

added by Pub. L. 95–109, set out as a note under section further with the consumer with respect to such 1692 of this title. debt, except— 

(1) to advise the consumer that the debt col- § 1692e. False or misleading representations lector’s further efforts are being terminated; 

(2) to notify the consumer that the debt col- A debt collector may not use any false, deceplector or creditor may invoke specified rem- tive, or misleading representation or means in 

edies which are ordinarily invoked by such connection with the collection of any debt. 

debt collector or creditor; or Without limiting the general application of the 

(3) where applicable, to notify the consumer foregoing, the following conduct is a violation of 

that the debt collector or creditor intends to this section: 

invoke a specified remedy. (1) The false representation or implication 

that the debt collector is vouched for, bonded If such notice from the consumer is made by by, or affiliated with the United States or any mail, notification shall be complete upon re- State, including the use of any badge, uni- ceipt. form, or facsimile thereof. (d) ‘‘Consumer’’ defined (2) The false representation of— 

For the purpose of this section, the term ‘‘con- (A) the character, amount, or legal status 

sumer’’ includes the consumer’s spouse, parent of any debt; or 

(if the consumer is a minor), guardian, executor, (B) any services rendered or compensation 

or administrator. which may be lawfully received by any debt 

collector for the collection of a debt. (Pub. L. 90–321, title VIII, §805, as added Pub. L. 

95–109, Sept. 20, 1977, 91 Stat. 876.) (3) The false representation or implication 

E that any individual is an attorney or that any FFECTIVE DATE

communication is from an attorney. Section effective upon the expiration of six months (4) The representation or implication that after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as nonpayment of any debt will result in the ar- added by Pub. L. 95–109, set out as a note under section rest or imprisonment of any person or the sei- 1692 of this title. 

zure, garnishment, attachment, or sale of any 

§ 1692d. Harassment or abuse property or wages of any person unless such 

action is lawful and the debt collector or cred- A debt collector may not engage in any con- itor intends to take such action. duct the natural consequence of which is to har- (5) The threat to take any action that can- ass, oppress, or abuse any person in connection not legally be taken or that is not intended to with the collection of a debt. Without limiting be taken. the general application of the foregoing, the fol- (6) The false representation or implication lowing conduct is a violation of this section: that a sale, referral, or other transfer of any (1) The use or threat of use of violence or interest in a debt shall cause the consumer other criminal means to harm the physical to— person, reputation, or property of any person. (A) lose any claim or defense to payment (2) The use of obscene or profane language or of the debt; or language the natural consequence of which is (B) become subject to any practice prohib- to abuse the hearer or reader. 

ited by this subchapter. (3) The publication of a list of consumers 

who allegedly refuse to pay debts, except to a (7) The false representation or implication 

consumer reporting agency or to persons that the consumer committed any crime or 

meeting the requirements of section 1681a(f) or other conduct in order to disgrace the con1681b(3) 1 of this title. sumer. 

(8) Communicating or threatening to com- 1See References in Text note below. municate to any person credit information 

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Page 1523 TITLE 15—COMMERCE AND TRADE § 1692g 

which is known or which should be known to § 1692f. Unfair practices 

be false, including the failure to communicate A debt collector may not use unfair or uncon- that a disputed debt is disputed. scionable means to collect or attempt to collect (9) The use or distribution of any written any debt. Without limiting the general applica- communication which simulates or is falsely tion of the foregoing, the following conduct is a represented to be a document authorized, is- violation of this section: sued, or approved by any court, official, or (1) The collection of any amount (including agency of the United States or any State, or any interest, fee, charge, or expense incidental which creates a false impression as to its to the principal obligation) unless such source, authorization, or approval. amount is expressly authorized by the agree- (10) The use of any false representation or ment creating the debt or permitted by law. deceptive means to collect or attempt to col- (2) The acceptance by a debt collector from lect any debt or to obtain information con- any person of a check or other payment in- cerning a consumer. strument postdated by more than five days un- (11) The failure to disclose in the initial less such person is notified in writing of the written communication with the consumer debt collector’s intent to deposit such check and, in addition, if the initial communication or instrument not more than ten nor less than with the consumer is oral, in that initial oral three business days prior to such deposit. communication, that the debt collector is at- (3) The solicitation by a debt collector of tempting to collect a debt and that any information obtained will be used for that purpose, any postdated check or other postdated payment instrument for the purpose of threaten- and the failure to disclose in subsequent communications that the communication is from ing or instituting criminal prosecution. 

(4) Depositing or threatening to deposit any a debt collector, except that this paragraph postdated check or other postdated payment shall not apply to a formal pleading made in instrument prior to the date on such check or connection with a legal action. instrument. (12) The false representation or implication (5) Causing charges to be made to any person that accounts have been turned over to inno- for communications by concealment of the cent purchasers for value. true purpose of the communication. Such (13) The false representation or implication charges include, but are not limited to, collect that documents are legal process. telephone calls and telegram fees. (14) The use of any business, company, or or- (6) Taking or threatening to take any non- ganization name other than the true name of judicial action to effect dispossession or dis- the debt collector’s business, company, or or- ablement of property if— ganization. (A) there is no present right to possession (15) The false representation or implication of the property claimed as collateral that documents are not legal process forms or through an enforceable security interest; do not require action by the consumer. (B) there is no present intention to take (16) The false representation or implication possession of the property; or that a debt collector operates or is employed (C) the property is exempt by law from by a consumer reporting agency as defined by such dispossession or disablement. section 1681a(f) of this title. 

(7) Communicating with a consumer regard- (Pub. L. 90–321, title VIII, §807, as added Pub. L. ing a debt by post card. 95–109, Sept. 20, 1977, 91 Stat. 877; amended Pub. (8) Using any language or symbol, other than L. 104–208, div. A, title II, §2305(a), Sept. 30, 1996, the debt collector’s address, on any envelope 110 Stat. 3009–425.) when communicating with a consumer by use 

of the mails or by telegram, except that a debt AMENDMENTS collector may use his business name if such 

1996—Par. (11). Pub. L. 104–208 amended par. (11) gen- name does not indicate that he is in the debt 

erally. Prior to amendment, par. (11) read as follows: collection business. ‘‘Except as otherwise provided for communications to 

acquire location information under section 1692b of this (Pub. L. 90–321, title VIII, §808, as added Pub. L. 

title, the failure to disclose clearly in all communica- 95–109, Sept. 20, 1977, 91 Stat. 879.) 

tions made to collect a debt or to obtain information 

about a consumer, that the debt collector is attempting EFFECTIVE DATE

to collect a debt and that any information obtained Section effective upon the expiration of six months will be used for that purpose.’’ after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as 

added by Pub. L. 95–109, set out as a note under section 

EFFECTIVE DATE OF 1996 AMENDMENT 1692 of this title. 

Pub. L. 104–208, div. A, title II, §2305(b), Sept. 30, 1996, 

110 Stat. 3009–425, provided that: ‘‘The amendment § 1692g. Validation of debts 

made by subsection (a) [amending this section] shall (a) Notice of debt; contents take effect 90 days after the date of enactment of this 

Act [Sept. 30, 1996] and shall apply to all communica- Within five days after the initial communications made after that date of enactment.’’ tion with a consumer in connection with the 

collection of any debt, a debt collector shall, unEFFECTIVE DATE less the following information is contained in 

the initial communication or the consumer has Section effective upon the expiration of six months 

after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as paid the debt, send the consumer a written noadded by Pub. L. 95–109, set out as a note under section tice containing— 

1692 of this title. (1) the amount of the debt; 

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§ 1692h TITLE 15—COMMERCE AND TRADE Page 1524 

(2) the name of the creditor to whom the (Pub. L. 90–321, title VIII, §809, as added Pub. L. 

debt is owed; 95–109, Sept. 20, 1977, 91 Stat. 879; amended Pub. 

(3) a statement that unless the consumer, L. 109–351, title VIII, §802, Oct. 13, 2006, 120 Stat. 

within thirty days after receipt of the notice, 2006.) 

disputes the validity of the debt, or any por- REFERENCES IN TEXT

tion thereof, the debt will be assumed to be The Gramm-Leach-Bliley Act, referred to in subsec. valid by the debt collector; (e), is Pub. L. 106–102, Nov. 12, 1999, 113 Stat. 1338. Title (4) a statement that if the consumer notifies V of the Act is classified principally to chapter 94 (§ the debt collector in writing within the thirty- 6801 et seq.) of this title. For complete classification of 

day period that the debt, or any portion there- this Act to the Code, see Short Title of 1999 Amendof, is disputed, the debt collector will obtain ment note set out under section 1811 of Title 12, Banks 

verification of the debt or a copy of a judg- and Banking, and Tables. 

ment against the consumer and a copy of such AMENDMENTS

verification or judgment will be mailed to the 2006—Subsec. (b). Pub. L. 109–351, §802(c), inserted at consumer by the debt collector; and end ‘‘Collection activities and communications that do 

(5) a statement that, upon the consumer’s not otherwise violate this subchapter may continue 

written request within the thirty-day period, during the 30-day period referred to in subsection (a) 

the debt collector will provide the consumer unless the consumer has notified the debt collector in 

with the name and address of the original writing that the debt, or any portion of the debt, is discreditor, if different from the current creditor. puted or that the consumer requests the name and address of the original creditor. Any collection activities (b) Disputed debts and communication during the 30-day period may not 

If the consumer notifies the debt collector in overshadow or be inconsistent with the disclosure of 

the consumer’s right to dispute the debt or request the writing within the thirty-day period described name and address of the original creditor.’’ in subsection (a) that the debt, or any portion Subsec. (d). Pub. L. 109–351, §802(a), added subsec. (d). thereof, is disputed, or that the consumer re- Subsec. (e). Pub. L. 109–351, §802(b), added subsec. (e). 

quests the name and address of the original EFFECTIVE DATE creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, Section applicable only with respect to debts for 

which the initial attempt to collect occurs after the ef- until the debt collector obtains verification of fective date of this subchapter, which takes effect upon the debt or a copy of a judgment, or the name the expiration of six months after Sept. 20, 1977, see and address of the original creditor, and a copy section 819 of Pub. L. 90–321, as added by Pub. L. 95–109, 

of such verification or judgment, or name and set out as a note under section 1692 of this title. 

address of the original creditor, is mailed to the 

consumer by the debt collector. Collection ac- § 1692h. Multiple debts 

tivities and communications that do not other- If any consumer owes multiple debts and 

wise violate this subchapter may continue dur- makes any single payment to any debt collector 

ing the 30-day period referred to in subsection with respect to such debts, such debt collector 

(a) unless the consumer has notified the debt may not apply such payment to any debt which 

collector in writing that the debt, or any por- is disputed by the consumer and, where application of the debt, is disputed or that the con- ble, shall apply such payment in accordance 

sumer requests the name and address of the with the consumer’s directions. 

original creditor. Any collection activities and (Pub. L. 90–321, title VIII, §810, as added Pub. L. communication during the 30-day period may 95–109, Sept. 20, 1977, 91 Stat. 880.) not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the EFFECTIVE DATE

debt or request the name and address of the Section effective upon the expiration of six months 

original creditor. after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as 

(c) Admission of liability added by Pub. L. 95–109, set out as a note under section 

1692 of this title. 

The failure of a consumer to dispute the validity of a debt under this section may not be con- § 1692i. Legal actions by debt collectors 

strued by any court as an admission of liability (a) Venue 

by the consumer. Any debt collector who brings any legal action 

(d) Legal pleadings on a debt against any consumer shall— 

(1) in the case of an action to enforce an in- A communication in the form of a formal terest in real property securing the consum- pleading in a civil action shall not be treated as er’s obligation, bring such action only in a ju- an initial communication for purposes of sub- dicial district or similar legal entity in which section (a). such real property is located; or 

(e) Notice provisions (2) in the case of an action not described in 

The sending or delivery of any form or notice paragraph (1), bring such action only in the juwhich does not relate to the collection of a debt dicial district or similar legal entity— 

(A) in which such consumer signed the and is expressly required by title 26, title V of 

Gramm-Leach-Bliley Act [15 U.S.C. 6801 et seq.], contract sued upon; or 

(B) in which such consumer resides at the or any provision of Federal or State law relating commencement of the action. to notice of data security breach or privacy, or 

any regulation prescribed under any such provi- (b) Authorization of actions 

sion of law, shall not be treated as an initial Nothing in this subchapter shall be construed 

communication in connection with debt collec- to authorize the bringing of legal actions by 

tion for purposes of this section. debt collectors. 

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Page 1525 TITLE 15—COMMERCE AND TRADE § 1692l 

(Pub. L. 90–321, title VIII, §811, as added Pub. L. (2) in any class action under subsection 

95–109, Sept. 20, 1977, 91 Stat. 880.) (a)(2)(B), the frequency and persistence of noncompliance by the debt collector, the nature EFFECTIVE DATE of such noncompliance, the resources of the 

Section effective upon the expiration of six months debt collector, the number of persons ad- after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as versely affected, and the extent to which the added by Pub. L. 95–109, set out as a note under section debt collector’s noncompliance was inten- 1692 of this title. tional. 

§ 1692j. Furnishing certain deceptive forms (c) Intent 

(a) It is unlawful to design, compile, and fur- A debt collector may not be held liable in any 

nish any form knowing that such form would be action brought under this subchapter if the debt 

used to create the false belief in a consumer collector shows by a preponderance of evidence 

that a person other than the creditor of such that the violation was not intentional and reconsumer is participating in the collection of or sulted from a bona fide error notwithstanding 

in an attempt to collect a debt such consumer the maintenance of procedures reasonably 

allegedly owes such creditor, when in fact such adapted to avoid any such error. 

person is not so participating. (d) Jurisdiction 

(b) Any person who violates this section shall An action to enforce any liability created by be liable to the same extent and in the same 

manner as a debt collector is liable under sec- this subchapter may be brought in any appropriate United States district court without re- tion 1692k of this title for failure to comply with gard to the amount in controversy, or in any a provision of this subchapter. other court of competent jurisdiction, within 

(Pub. L. 90–321, title VIII, §812, as added Pub. L. one year from the date on which the violation 

95–109, Sept. 20, 1977, 91 Stat. 880.) occurs. 

EFFECTIVE DATE (e) Advisory opinions of Bureau 

Section effective upon the expiration of six months No provision of this section imposing any liafter Sept. 20, 1977, see section 819 of Pub. L. 90–321, as ability shall apply to any act done or omitted in 

added by Pub. L. 95–109, set out as a note under section good faith in conformity with any advisory 

1692 of this title. opinion of the Bureau, notwithstanding that 

§ 1692k. Civil liability after such act or omission has occurred, such 

opinion is amended, rescinded, or determined by 

(a) Amount of damages judicial or other authority to be invalid for any 

Except as otherwise provided by this section, reason. 

any debt collector who fails to comply with any (Pub. L. 90–321, title VIII, §813, as added Pub. L. provision of this subchapter with respect to any 95–109, Sept. 20, 1977, 91 Stat. 881; amended Pub. person is liable to such person in an amount L. 111–203, title X, §1089(1), July 21, 2010, 124 equal to the sum of— Stat. 2092.) (1) any actual damage sustained by such person as a result of such failure; AMENDMENTS

(2)(A) in the case of any action by an indi- 2010—Subsec. (e). Pub. L. 111–203 substituted ‘‘Buvidual, such additional damages as the court reau’’ for ‘‘Commission’’. 

may allow, but not exceeding $1,000; or EFFECTIVE DATE OF 2010 AMENDMENT (B) in the case of a class action, (i) such 

amount for each named plaintiff as could be Amendment by Pub. L. 111–203 effective on the desrecovered under subparagraph (A), and (ii) ignated transfer date, see section 1100H of Pub. L. 

111–203, set out as a note under section 552a of Title 5, such amount as the court may allow for all Government Organization and Employees. other class members, without regard to a minimum individual recovery, not to exceed the EFFECTIVE DATE

lesser of $500,000 or 1 per centum of the net Section effective upon the expiration of six months worth of the debt collector; and after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as 

(3) in the case of any successful action to en- added by Pub. L. 95–109, set out as a note under section 

force the foregoing liability, the costs of the 1692 of this title. 

action, together with a reasonable attorney’s 

fee as determined by the court. On a finding by § 1692l. Administrative enforcement 

the court that an action under this section (a) Federal Trade Commission 

was brought in bad faith and for the purpose of The Federal Trade Commission shall be au- harassment, the court may award to the de- thorized to enforce compliance with this sub- fendant attorney’s fees reasonable in relation chapter, except to the extent that enforcement to the work expended and costs. of the requirements imposed under this sub- (b) Factors considered by court chapter is specifically committed to another 

In determining the amount of liability in any Government agency under any of paragraphs (1) 

action under subsection (a), the court shall con- through (5) of subsection (b), subject to subtitle 

sider, among other relevant factors— B of the Consumer Financial Protection Act of 

(1) in any individual action under subsection 2010 [12 U.S.C. 5511 et seq.]. For purpose of the 

(a)(2)(A), the frequency and persistence of non- exercise by the Federal Trade Commission of its 

compliance by the debt collector, the nature functions and powers under the Federal Trade 

of such noncompliance, and the extent to Commission Act (15 U.S.C. 41 et seq.), a violawhich such noncompliance was intentional; or tion of this subchapter shall be deemed an unCase: 4:20-cv-01674 Doc. #: 2 Filed: 11/25/20 Page: 38 of 51 PageID #: 70
§ 1692l TITLE 15—COMMERCE AND TRADE Page 1526 

fair or deceptive act or practice in violation of any Act referred to in that subsection, a violathat Act. All of the functions and powers of the tion of any requirement imposed under this subFederal Trade Commission under the Federal chapter shall be deemed to be a violation of a reTrade Commission Act are available to the Fed- quirement imposed under that Act. In addition 

eral Trade Commission to enforce compliance by to its powers under any provision of law specifiany person with this subchapter, irrespective of cally referred to in subsection (b), each of the 

whether that person is engaged in commerce or agencies referred to in that subsection may exmeets any other jurisdictional tests under the ercise, for the purpose of enforcing compliance 

Federal Trade Commission Act, including the with any requirement imposed under this subpower to enforce the provisions of this sub- chapter any other authority conferred on it by 

chapter, in the same manner as if the violation law, except as provided in subsection (d). had been a violation of a Federal Trade Commis- (d) Rules and regulations sion trade regulation rule. 

(b) Applicable provisions of law Except as provided in section 1029(a) of the 

Consumer Financial Protection Act of 2010 [12 Subject to subtitle B of the Consumer Finan- U.S.C. 5519(a)], the Bureau may prescribe rules cial Protection Act of 2010, compliance with any with respect to the collection of debts by debt requirements imposed under this subchapter collectors, as defined in this subchapter. shall be enforced under— 

(1) section 8 of the Federal Deposit Insur- (Pub. L. 90–321, title VIII, §814, as added Pub. L. 

ance Act [12 U.S.C. 1818], by the appropriate 95–109, Sept. 20, 1977, 91 Stat. 881; amended Pub. 

Federal banking agency, as defined in section L. 98–443, §9(n), Oct. 4, 1984, 98 Stat. 1708; Pub. L. 

3(q) of the Federal Deposit Insurance Act (12 101–73, title VII, §744(n), Aug. 9, 1989, 103 Stat. 

U.S.C. 1813(q)), with respect to— 440; Pub. L. 102–242, title II, §212(e), Dec. 19, 1991, 

(A) national banks, Federal savings asso- 105 Stat. 2301; Pub. L. 102–550, title XVI, 

ciations, and Federal branches and Federal §1604(a)(8), Oct. 28, 1992, 106 Stat. 4082; Pub. L. 

agencies of foreign banks; 104–88, title III, §316, Dec. 29, 1995, 109 Stat. 949; 

(B) member banks of the Federal Reserve Pub. L. 111–203, title X, §1089(3), (4), July 21, 2010, System (other than national banks), 124 Stat. 2092, 2093.) branches and agencies of foreign banks R T (other than Federal branches, Federal agen- EFERENCES IN EXT

cies, and insured State branches of foreign The Consumer Financial Protection Act of 2010, rebanks), commercial lending companies ferred to in subsecs. (a) and (b), is title X of Pub. L. 

owned or controlled by foreign banks, and 111–203, July 21, 2010, 124 Stat. 1955. Subtitles B 

organizations operating under section 25 or (§§1021–1029A) and E (§§1051–1058) of the Act are classified generally to parts B (§5511 et seq.) and E (§5561 et 25A of the Federal Reserve Act [12 U.S.C. 601 seq.), respectively, of subchapter V of chapter 53 of et seq., 611 et seq.]; and Title 12, Banks and Banking. For complete classifica- (C) banks and State savings associations tion of subtitles B and E to the Code, see Tables. insured by the Federal Deposit Insurance The Federal Trade Commission Act, referred to in Corporation (other than members of the subsec. (a), is act Sept. 26, 1914, ch. 311, 38 Stat. 717, Federal Reserve System), and insured State which is classified generally to subchapter I (§41 et 

branches of foreign banks; seq.) of chapter 2 of this title. For complete classification of this Act to the Code, see section 58 of this title (2) the Federal Credit Union Act [12 U.S.C. and Tables. 1751 et seq.], by the Administrator of the Na- Sections 25 and 25A of the Federal Reserve Act, re- tional Credit Union Administration with re- ferred to in subsec. (b)(1)(B), are classified to sub- spect to any Federal credit union; chapters I (§601 et seq.) and II (§611 et seq.), respec- (3) subtitle IV of title 49, by the Secretary of tively, of chapter 6 of Title 12, Banks and Banking. 

Transportation, with respect to all carriers The Federal Credit Union Act, referred to in subsec. 

subject to the jurisdiction of the Surface (b)(2), is act June 26, 1934, ch. 750, 48 Stat. 1216, which 

Transportation Board; is classified generally to chapter 14 (§1751 et seq.) of 

(4) part A of subtitle VII of title 49, by the Title 12. For complete classification of this Act to the 

Secretary of Transportation with respect to Code, see section 1751 of Title 12 and Tables. 

The Packers and Stockyards Act, 1921, referred to in any air carrier or any foreign air carrier sub- subsec. (b)(5), is act Aug. 15, 1921, ch. 64, 42 Stat. 159, ject to that part; which is classified generally to chapter 9 (§181 et seq.) (5) the Packers and Stockyards Act, 1921 [7 of Title 7, Agriculture. For complete classification of U.S.C. 181 et seq.] (except as provided in sec- this Act to the Code, see section 181 of Title 7 and tion 406 of that Act [7 U.S.C. 226, 227]), by the Tables. 

Secretary of Agriculture with respect to any 

activities subject to that Act; and CODIFICATION

(6) subtitle E of the Consumer Financial In subsec. (b)(3), ‘‘subtitle IV of title 49’’ substituted 

Protection Act of 2010 [12 U.S.C. 5561 et seq.], for ‘‘the Acts to regulate commerce’’ on authority of 

by the Bureau, with respect to any person sub- Pub. L. 95–473, §3(b), Oct. 17, 1978, 92 Stat. 1466, the first 

ject to this subchapter. section of which enacted subtitle IV of Title 49, Transportation. The terms used in paragraph (1) that are not de- In subsec. (b)(4), ‘‘part A of subtitle VII of title 49’’ fined in this subchapter or otherwise defined in substituted for ‘‘the Federal Aviation Act of 1958 [49 

section 3(s) of the Federal Deposit Insurance Act App. U.S.C. 1301 et seq.]’’ and ‘‘that part’’ substituted 

(12 U.S.C. 1813(s)) shall have the meaning given for ‘‘that Act’’ on authority of Pub. L. 103–272, §6(b), 

to them in section 1(b) of the International July 5, 1994, 108 Stat. 1378, the first section of which enBanking Act of 1978 (12 U.S.C. 3101). acted subtitles II, III, and V to X of Title 49. 

(c) Agency powers Section 1089(4) of Pub. L. 111–203, which directed 

amendment ‘‘in subsection (d)’’ of the Fair Debt CollecFor the purpose of the exercise by any agency tion Practices Act, was executed in subsec. (d) of this 

referred to in subsection (b) of its powers under section, which is section 814 of the Act, to reflect the 

Case: 4:20-cv-01674 Doc. #: 2 Filed: 11/25/20 Page: 39 of 51 PageID #: 71
Page 1527 TITLE 15—COMMERCE AND TRADE § 1692m 

probable intent of Congress. See 2010 Amendment note 1813(s)) shall have the meaning given to them in section 

below. 1(b) of the International Banking Act of 1978 (12 U.S.C. 

3101).’’ AMENDMENTS Pub. L. 102–242, §212(e)(1), added par. (1) and struck 

2010—Subsec. (a). Pub. L. 111–203, §1089(3)(A), added out former par. (1) which read as follows: ‘‘section 8 of 

subsec. (a) and struck out former subsec. (a). Prior to Federal Deposit Insurance Act, in the case of— 

amendment, text read as follows: ‘‘Compliance with ‘‘(A) national banks, by the Comptroller of the Curthis subchapter shall be enforced by the Commission, rency; 

except to the extent that enforcement of the require- ‘‘(B) member banks of the Federal Reserve System 

ments imposed under this subchapter is specifically (other than national banks), by the Federal Reserve 

committed to another agency under subsection (b) of Board; and 

this section. For purpose of the exercise by the Com- ‘‘(C) banks the deposits or accounts of which are inmission of its functions and powers under the Federal sured by the Federal Deposit Insurance Corporation 

Trade Commission Act, a violation of this subchapter (other than members of the Federal Reserve System), 

shall be deemed an unfair or deceptive act or practice by the Board of Directors of the Federal Deposit Inin violation of that Act. All of the functions and powers surance Corporation;’’. 

of the Commission under the Federal Trade Commis- 1989—Subsec. (b)(2). Pub. L. 101–73 amended par. (2) 

sion Act are available to the Commission to enforce generally. Prior to amendment, par. (2) read as follows: 

compliance by any person with this subchapter, irre- ‘‘section 5(d) of the Home Owners Loan Act of 1933, secspective of whether that person is engaged in com- tion 407 of the National Housing Act, and sections 6(i) 

merce or meets any other jurisdictional tests in the and 17 of the Federal Home Loan Bank Act, by the FedFederal Trade Commission Act, including the power to eral Home Loan Bank Board (acting directly or 

enforce the provisions of this subchapter in the same through the Federal Savings and Loan Insurance Cormanner as if the violation had been a violation of a poration), in the case of any institution subject to any 

Federal Trade Commission trade regulation rule.’’ of those provisions;’’. 

Subsec. (b). Pub. L. 111–203, §1089(3)(B)(i), substituted 1984—Subsec. (b)(5). Pub. L. 98–443 substituted ‘‘Sec-

‘‘Subject to subtitle B of the Consumer Financial Pro- retary of Transportation’’ for ‘‘Civil Aeronautics 

tection Act of 2010, compliance’’ for ‘‘Compliance’’ in Board’’. 

introductory provisions. 

Subsec. (b)(1). Pub. L. 111–203, §1089(3)(B)(ii), added EFFECTIVE DATE OF 2010 AMENDMENT

par. (1) and struck out former par. (1) which read as fol- Amendment by Pub. L. 111–203 effective on the deslows: ‘‘section 8 of the Federal Deposit Insurance Act, ignated transfer date, see section 1100H of Pub. L. 

in the case of— 111–203, set out as a note under section 552a of Title 5, ‘‘(A) national banks, and Federal branches and Fed- Government Organization and Employees. eral agencies of foreign banks, by the Office of the 

Comptroller of the Currency; EFFECTIVE DATE OF 1995 AMENDMENT

‘‘(B) member banks of the Federal Reserve System Amendment by Pub. L. 104–88 effective Jan. 1, 1996, (other than national banks), branches and agencies of see section 2 of Pub. L. 104–88, set out as an Effective foreign banks (other than Federal branches, Federal Date note under section 1301 of Title 49, Transpor- agencies, and insured State branches of foreign tation. banks), commercial lending companies owned or controlled by foreign banks, and organizations operating EFFECTIVE DATE OF 1992 AMENDMENT

under section 25 or 25(a) of the Federal Reserve Act, Amendment by Pub. L. 102–550 effective as if included by the Board of Governors of the Federal Reserve in the Federal Deposit Insurance Corporation Improve- System; and ment Act of 1991, Pub. L. 102–242, as of Dec. 19, 1991, see ‘‘(C) banks insured by the Federal Deposit Insur- section 1609(a) of Pub. L. 102–550, set out as a note ance Corporation (other than members of the Federal under section 191 of Title 12, Banks and Banking. Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal EFFECTIVE DATE OF 1984 AMENDMENT

Deposit Insurance Corporation;’’. 

Subsec. (b)(2) to (6). Pub. L. 111–203, Amendment by Pub. L. 98–443 effective Jan. 1, 1985, 

see section 9(v) of Pub. L. 98–443, set out as a note under §1089(3)(B)(ii)–(vi), added par. (6), redesignated former 

pars. (3) to (6) as (2) to (5), respectively, and struck out section 5314 of Title 5, Government Organization and 

Employees. former par. (2) which read as follows: ‘‘section 8 of the 

Federal Deposit Insurance Act, by the Director of the EFFECTIVE DATE Office of Thrift Supervision, in the case of a savings association the deposits of which are insured by the Fed- Section effective upon the expiration of six months 

eral Deposit Insurance Corporation;’’. after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as 

Subsec. (d). Pub. L. 111–203, §1089(4), substituted ‘‘Ex- added by Pub. L. 95–109, set out as a note under section 

cept as provided in section 1029(a) of the Consumer Fi- 1692 of this title. 

nancial Protection Act of 2010, the Bureau may pre- TRANSFER OF FUNCTIONS scribe rules with respect to the collection of debts by 

debt collectors, as defined in this subchapter’’ for ‘‘Nei- Functions vested in Administrator of National Credit 

ther the Commission nor any other agency referred to Union Administration transferred and vested in Nain subsection (b) of this section may promulgate trade tional Credit Union Administration Board pursuant to 

regulation rules or other regulations with respect to section 1752a of Title 12, Banks and Banking. 

the collection of debts by debt collectors as defined in 

this subchapter’’. See Codification note above. § 1692m. Reports to Congress by the Bureau; 

1995—Subsec. (b)(4). Pub. L. 104–88 substituted ‘‘Sec- views of other Federal agencies 

retary of Transportation, with respect to all carriers 

subject to the jurisdiction of the Surface Transpor- (a) Not later than one year after the effective 

tation Board’’ for ‘‘Interstate Commerce Commission date of this subchapter and at one-year intervals 

with respect to any common carrier subject to those thereafter, the Bureau shall make reports to the 

Acts’’. Congress concerning the administration of its 1992—Subsec. (b)(1)(C). Pub. L. 102–550 substituted functions under this subchapter, including such semicolon for period at end. recommendations as the Bureau deems nec- 1991—Subsec. (b). Pub. L. 102–242, §212(e)(2), inserted 

at end ‘‘The terms used in paragraph (1) that are not essary or appropriate. In addition, each report of 

defined in this subchapter or otherwise defined in sec- the Bureau shall include its assessment of the 

tion 3(s) of the Federal Deposit Insurance Act (12 U.S.C. extent to which compliance with this subCase: 4:20-cv-01674 Doc. #: 2 Filed: 11/25/20 Page: 40 of 51 PageID #: 72
§ 1692n TITLE 15—COMMERCE AND TRADE Page 1528 

chapter is being achieved and a summary of the AMENDMENTS

enforcement actions taken by the Bureau under 2010—Pub. L. 111–203 substituted ‘‘Bureau’’ for ‘‘Comsection 1692l of this title. mission’’ in two places. 

(b) In the exercise of its functions under this EFFECTIVE DATE OF 2010 AMENDMENT subchapter, the Bureau may obtain upon request 

the views of any other Federal agency which ex- Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. ercises enforcement functions under section 111–203, set out as a note under section 552a of Title 5, 1692l of this title. Government Organization and Employees. 

(Pub. L. 90–321, title VIII, §815, as added Pub. L. EFFECTIVE DATE 95–109, Sept. 20, 1977, 91 Stat. 882; amended Pub. 

L. 111–203, title X, §1089(1), July 21, 2010, 124 Section effective upon the expiration of six months 

after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as Stat. 2092.) added by Pub. L. 95–109, set out as a note under section 

REFERENCES IN TEXT 1692 of this title. 

The effective date of this subchapter, referred to in § 1692p. Exception for certain bad check enforcesubsec. (a), is the date occurring on expiration of six ment programs operated by private entities months after Sept. 20, 1977. See section 819 of Pub. L. 

90–321, set out as an Effective Date note under section (a) In general 

1692 of this title. (1) Treatment of certain private entities 

AMENDMENTS Subject to paragraph (2), a private entity 

shall be excluded from the definition of a debt 2010—Pub. L. 111–203 substituted ‘‘Bureau’’ for ‘‘Commission’’ wherever appearing. collector, pursuant to the exception provided 

in section 1692a(6) of this title, with respect to 

EFFECTIVE DATE OF 2010 AMENDMENT the operation by the entity of a program deAmendment by Pub. L. 111–203 effective on the des- scribed in paragraph (2)(A) under a contract 

ignated transfer date, see section 1100H of Pub. L. described in paragraph (2)(B). 

111–203, set out as a note under section 552a of Title 5, (2) Conditions of applicability Government Organization and Employees. Paragraph (1) shall apply if— 

EFFECTIVE DATE (A) a State or district attorney estabSection effective upon the expiration of six months lishes, within the jurisdiction of such State 

after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as or district attorney and with respect to aladded by Pub. L. 95–109, set out as a note under section leged bad check violations that do not in1692 of this title. volve a check described in subsection (b), a 

pretrial diversion program for alleged bad § 1692n. Relation to State laws check offenders who agree to participate volThis subchapter does not annul, alter, or af- untarily in such program to avoid criminal 

fect, or exempt any person subject to the provi- prosecution; 

sions of this subchapter from complying with (B) a private entity, that is subject to an 

the laws of any State with respect to debt col- administrative support services contract 

lection practices, except to the extent that with a State or district attorney and operthose laws are inconsistent with any provision ates under the direction, supervision, and 

of this subchapter, and then only to the extent control of such State or district attorney, 

of the inconsistency. For purposes of this sec- operates the pretrial diversion program detion, a State law is not inconsistent with this scribed in subparagraph (A); and 

subchapter if the protection such law affords (C) in the course of performing duties deleany consumer is greater than the protection gated to it by a State or district attorney 

provided by this subchapter. under the contract, the private entity referred to in subparagraph (B)— (Pub. L. 90–321, title VIII, §816, as added Pub. L. (i) complies with the penal laws of the 95–109, Sept. 20, 1977, 91 Stat. 883.) State; 

EFFECTIVE ATE D (ii) conforms with the terms of the contract and directives of the State or district Section effective upon the expiration of six months attorney; after Sept. 20, 1977, see section 819 of Pub. L. 90–321, as (iii) does not exercise independent pros- added by Pub. L. 95–109, set out as a note under section ecutorial discretion; 1692 of this title. 

(iv) contacts any alleged offender re-

§ 1692o. Exemption for State regulation ferred to in subparagraph (A) for purposes 

of participating in a program referred to in The Bureau shall by regulation exempt from such paragraph— the requirements of this subchapter any class of (I) only as a result of any determina- debt collection practices within any State if the tion by the State or district attorney Bureau determines that under the law of that that probable cause of a bad check viola- State that class of debt collection practices is tion under State penal law exists, and subject to requirements substantially similar to that contact with the alleged offender those imposed by this subchapter, and that for purposes of participation in the pro- there is adequate provision for enforcement. gram is appropriate; and 

(Pub. L. 90–321, title VIII, §817, as added Pub. L. (II) the alleged offender has failed to 

95–109, Sept. 20, 1977, 91 Stat. 883; amended Pub. pay the bad check after demand for payL. 111–203, title X, §1089(1), July 21, 2010, 124 ment, pursuant to State law, is made for 

Stat. 2092.) payment of the check amount; 

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Page 1529 TITLE 15—COMMERCE AND TRADE § 1693 

(v) includes as part of an initial written tion 2 of title 1), municipality, or comparable 

communication with an alleged offender a jurisdiction, including State attorneys general 

clear and conspicuous statement that— who act as chief elected or appointed prosecut-

(I) the alleged offender may dispute ing attorneys in a district, county (as so dethe validity of any alleged bad check fined), municipality or comparable jurisdicviolation; tion, who may be referred to by a variety of 

(II) where the alleged offender knows, titles such as district attorneys, prosecuting 

or has reasonable cause to believe, that attorneys, commonwealth’s attorneys, solicithe alleged bad check violation is the re- tors, county attorneys, and state’s attorneys, 

sult of theft or forgery of the check, and who are responsible for the prosecution of 

identity theft, or other fraud that is not State crimes and violations of jurisdictionthe result of the conduct of the alleged specific local ordinances. 

offender, the alleged offender may file a (2) Check crime report with the appropriate law The term ‘‘check’’ has the same meaning as enforcement agency; and in section 5002(6) of title 12. (III) if the alleged offender notifies the 

private entity or the district attorney in (3) Bad check violation 

writing, not later than 30 days after The term ‘‘bad check violation’’ means a 

being contacted for the first time pursu- violation of the applicable State criminal law ant to clause (iv), that there is a dispute relating to the writing of dishonored checks. pursuant to this subsection, before further restitution efforts are pursued, the (Pub. L. 90–321, title VIII, §818, as added Pub. L. 

district attorney or an employee of the 109–351, title VIII, §801(a)(2), Oct. 13, 2006, 120 

district attorney authorized to make Stat. 2004.) 

such a determination makes a deter- SUBCHAPTER VI—ELECTRONIC FUND mination that there is probable cause to TRANSFERS believe that a crime has been committed; and § 1693. Congressional findings and declaration of 

(vi) charges only fees in connection with purpose 

services under the contract that have been (a) Rights and liabilities undefined authorized by the contract with the State The Congress finds that the use of electronic or district attorney. 

(b) Certain checks excluded systems to transfer funds provides the potential 

for substantial benefits to consumers. However, A check is described in this subsection if the due to the unique characteristics of such sys- check involves, or is subsequently found to in- tems, the application of existing consumer pro- volve— tection legislation is unclear, leaving the rights (1) a postdated check presented in connec- and liabilities of consumers, financial institu- tion with a payday loan, or other similar tions, and intermediaries in electronic fund transaction, where the payee of the check transfers undefined. 

knew that the issuer had insufficient funds at (b) Purposes the time the check was made, drawn, or delivered; It is the purpose of this subchapter to provide 

(2) a stop payment order where the issuer a basic framework establishing the rights, liacted in good faith and with reasonable cause abilities, and responsibilities of participants in 

in stopping payment on the check; electronic fund and remittance transfer sys-

(3) a check dishonored because of an adjust- tems. The primary objective of this subchapter, 

ment to the issuer’s account by the financial however, is the provision of individual consumer 

institution holding such account without pro- rights. 

viding notice to the person at the time the (Pub. L. 90–321, title IX, §902, as added Pub. L. check was made, drawn, or delivered; 95–630, title XX, §2001, Nov. 10, 1978, 92 Stat. 3728; (4) a check for partial payment of a debt amended Pub. L. 111–203, title X, §1073(a)(1), July where the payee had previously accepted par- 21, 2010, 124 Stat. 2060.) tial payment for such debt; 

(5) a check issued by a person who was not AMENDMENTS

competent, or was not of legal age, to enter 2010—Subsec. (b). Pub. L. 111–203 inserted ‘‘and remit- into a legal contractual obligation at the time tance’’ after ‘‘electronic fund’’. 

the check was made, drawn, or delivered; or 

(6) a check issued to pay an obligation aris- EFFECTIVE DATE OF 2010 AMENDMENT

ing from a transaction that was illegal in the Amendment by Pub. L. 111–203 effective 1 day after 

jurisdiction of the State or district attorney July 21, 2010, except as otherwise provided, see section 

at the time the check was made, drawn, or de- 4 of Pub. L. 111–203, set out as an Effective Date note 

livered. under section 5301 of Title 12, Banks and Banking. 

(c) Definitions EFFECTIVE DATE

For purposes of this section, the following Pub. L. 90–321, title IX, §923, formerly §921, as added 

definitions shall apply: by Pub. L. 95–630, title XX, §2001, Nov. 10, 1978, 92 Stat. 

(1) State or district attorney 3741, renumbered §922, Pub. L. 111–24, title IV, §401(1), 

May 22, 2009, 123 Stat. 1751; renumbered §923, Pub. L. The term ‘‘State or district attorney’’ means 111–203, title X, §1073(a)(3), July 21, 2010, 124 Stat. 2060, 

the chief elected or appointed prosecuting at- provided that: ‘‘This title [enacting this subchapter] 

torney in a district, county (as defined in sec- takes effect upon the expiration of eighteen months 

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ATTACHMENT B

12 C.F.R. §1022.42. Reasonable policies and procedures concerning the accuracy and integrity 

of furnished information. 

(a) Policies and procedures. Each furnisher must establish and implement reasonable

written policies and procedures regarding the accuracy and integrity of the

information relating to consumers that it furnishes to a consumer reporting

agency. The policies and procedures must be appropriate to the nature, size,

complexity, and scope of each furnisher’s activities.

(b) Guidelines. Each furnisher must consider the guidelines in appendix E of this part

in developing its policies and procedures required by this section, and incorporate

those guidelines that are appropriate.

(c) Reviewing and updating policies and procedures. Each furnisher must review its

policies and procedures required by this section periodically and update them as

necessary to ensure their continued effectiveness.

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ATTACHMENT C

Appendix E to Part 1022—Interagency Guidelines Concerning the Accuracy and Integrity of 

Information Furnished to Consumer Reporting Agencies 

The Bureau encourages voluntary furnishing of information to consumer reporting 

agencies. Section 1022.42 of this part requires each furnisher to establish and implement 

reasonable written policies and procedures concerning the accuracy and integrity of the 

information it furnishes to consumer reporting agencies. Under §1022.42(b) of this part, a 

furnisher must consider the guidelines set forth below in developing its policies and procedures. 

In establishing these policies and procedures, a furnisher may include any of its existing policies 

and procedures that are relevant and appropriate. Section 1022.42(c) requires each furnisher to 

review its policies and procedures periodically and update them as necessary to ensure their 

continued effectiveness.

I. Nature, Scope, and Objectives of Policies and Procedures

(a) Nature and Scope. Section 1022.42(a) of this part requires that a furnisher’s

policies and procedures be appropriate to the nature, size, complexity, and scope of the 

furnisher's activities. In developing its policies and procedures, a furnisher should consider, 

for example:

(1) The types of business activities in which the furnisher engages;

(2) The nature and frequency of the information the furnisher provides to

consumer reporting agencies; and

(3) The technology used by the furnisher to furnish information to consumer

reporting agencies.

(b) Objectives. A furnisher’s policies and procedures should be reasonably designed

to promote the following objectives: 

(1) To furnish information about accounts or other relationships with a

consumer that is accurate, such that the furnished information: 

(i) Identifies the appropriate consumer;

(ii) Reflects the terms of and liability for those accounts or other

relationships; and

(iii) Reflects the consumer’s performance and other conduct with

respect to the account or other relationship;

(2) To furnish information about accounts or other relationships with a

consumer that has integrity, such that the furnished information: 

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(i) Is substantiated by the furnisher’s records at the time it is

furnished;

(ii) Is furnished in a form and manner that is designed to minimize the

likelihood that the information may be incorrectly reflected in a

consumer report; thus, the furnished information should:

(A) Include appropriate identifying information about the

consumer to whom it pertains; and

(B) Be furnished in a standardized and clearly understandable

form and manner and with a date specifying the time period to

which the information pertains; and

(iii) Includes the credit limit, if applicable and in the furnisher’s

possession;

(3) To conduct reasonable investigations of consumer disputes and take

appropriate actions based on the outcome of such investigations; and 

(4) To update the information it furnishes as necessary to reflect the current

status of the consumer’s account or other relationship, including, for example: 

(i) Any transfer of an account (e.g., by sale or assignment for

collection) to a third party; and

(ii) Any cure of the consumer’s failure to abide by the terms of the

account or other relationship.

II. Establishing and Implementing Policies and Procedures

In establishing and implementing its policies and procedures, a furnisher should:

(a) Identify practices or activities of the furnisher that can compromise the accuracy

or integrity of information furnished to consumer reporting agencies, such as by: 

(1) Reviewing its existing practices and activities, including the technological

means and other methods it uses to furnish information to consumer reporting agencies 

and the frequency and timing of its furnishing of information; 

(2) Reviewing its historical records relating to accuracy or integrity or to

disputes; reviewing other information relating to the accuracy or integrity of information 

provided by the furnisher to consumer reporting agencies; and considering the types of 

errors, omissions, or other problems that may have affected the accuracy or integrity of 

information it has furnished about consumers to consumer reporting agencies; 

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(3) Considering any feedback received from consumer reporting agencies,

consumers, or other appropriate parties; 

(4) Obtaining feedback from the furnisher’s staff; and

(5) Considering the potential impact of the furnisher’s policies and procedures

on consumers. 

(b) Evaluate the effectiveness of existing policies and procedures of the furnisher

regarding the accuracy and integrity of information furnished to consumer reporting 

agencies; consider whether new, additional, or different policies and procedures are 

necessary; and consider whether implementation of existing policies and procedures should 

be modified to enhance the accuracy and integrity of information about consumers furnished 

to consumer reporting agencies. 

(c) Evaluate the effectiveness of specific methods (including technological means)

the furnisher uses to provide information to consumer reporting agencies; how those methods 

may affect the accuracy and integrity of the information it provides to consumer reporting 

agencies; and whether new, additional, or different methods (including technological means) 

should be used to provide information to consumer reporting agencies to enhance the 

accuracy and integrity of that information.

III. Specific Components of Policies and Procedures

In developing its policies and procedures, a furnisher should address the following, as

appropriate:

(a) Establishing and implementing a system for furnishing information about

consumers to consumer reporting agencies that is appropriate to the nature, size, complexity, 

and scope of the furnisher’s business operations. 

(b) Using standard data reporting formats and standard procedures for compiling and

furnishing data, where feasible, such as the electronic transmission of information about 

consumers to consumer reporting agencies. 

(c) Maintaining records for a reasonable period of time, not less than any applicable

recordkeeping requirement, in order to substantiate the accuracy of any information about 

consumers it furnishes that is subject to a direct dispute. 

(d) Establishing and implementing appropriate internal controls regarding the

accuracy and integrity of information about consumers furnished to consumer reporting 

agencies, such as by implementing standard procedures and verifying random samples of 

information provided to consumer reporting agencies. 

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(e) Training staff that participates in activities related to the furnishing of information

about consumers to consumer reporting agencies to implement the policies and procedures. 

(f) Providing for appropriate and effective oversight of relevant service providers

whose activities may affect the accuracy or integrity of information about consumers 

furnished to consumer reporting agencies to ensure compliance with the policies and 

procedures. 

(g) Furnishing information about consumers to consumer reporting agencies

following mergers, portfolio acquisitions or sales, or other acquisitions or transfers of 

accounts or other obligations in a manner that prevents re-aging of information, duplicative 

reporting, or other problems that may similarly affect the accuracy or integrity of the 

information furnished. 

(h) Deleting, updating, and correcting information in the furnisher’s records, as

appropriate, to avoid furnishing inaccurate information. 

(i) Conducting reasonable investigations of disputes.

(j) Designing technological and other means of communication with consumer

reporting agencies to prevent duplicative reporting of accounts, erroneous association of 

information with the wrong consumer(s), and other occurrences that may compromise the 

accuracy or integrity of information provided to consumer reporting agencies. 

(k) Providing consumer reporting agencies with sufficient identifying information in

the furnisher’s possession about each consumer about whom information is furnished to 

enable the consumer reporting agency properly to identify the consumer. 

(l) Conducting a periodic evaluation of its own practices, consumer reporting agency

practices of which the furnisher is aware, investigations of disputed information, corrections 

of inaccurate information, means of communication, and other factors that may affect the 

accuracy or integrity of information furnished to consumer reporting agencies. 

(m) Complying with applicable requirements under the FCRA and its implementing

regulations. 

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ATTACHMENT D

12 CFR §1022.43 Direct disputes.

(a) General rule. Except as otherwise provided in this section, a furnisher must

conduct a reasonable investigation of a direct dispute if it relates to:

(1) The consumer’s liability for a credit account or other debt with the

furnisher, such as direct disputes relating to whether there is or has been identity theft or 

fraud against the consumer, whether there is individual or joint liability on an account, or 

whether the consumer is an authorized user of a credit account; 

(2) The terms of a credit account or other debt with the furnisher, such as

direct disputes relating to the type of account, principal balance, scheduled payment 

amount on an account, or the amount of the credit limit on an open-end account; 

(3) The consumer's performance or other conduct concerning an account or

other relationship with the furnisher, such as direct disputes relating to the current 

payment status, high balance, date a payment was made, the amount of a payment made, 

or the date an account was opened or closed; or 

(4) Any other information contained in a consumer report regarding an

account or other relationship with the furnisher that bears on the consumer’s 

creditworthiness, credit standing, credit capacity, character, general reputation, personal 

characteristics, or mode of living. 

(b) Exceptions. The requirements of paragraph (a) of this section do not apply to a

furnisher if:

(1) The direct dispute relates to:

(i) The consumer’s identifying information (other than a direct dispute

relating to a consumer’s liability for a credit account or other debt with the 

furnisher, as provided in paragraph (a)(1) of this section) such as name(s), date of 

birth, Social Security number, telephone number(s), or address(es); 

(ii) The identity of past or present employers;

(iii) Inquiries or requests for a consumer report;

(iv) Information derived from public records, such as judgments,

bankruptcies, liens, and other legal matters (unless provided by a furnisher with 

an account or other relationship with the consumer); 

(v) Information related to fraud alerts or active duty alerts; or

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(vi) Information provided to a consumer reporting agency by another

furnisher; or

(2) The furnisher has a reasonable belief that the direct dispute is submitted

by, is prepared on behalf of the consumer by, or is submitted on a form supplied to the 

consumer by, a credit repair organization, as defined in 15 U.S.C. 1679a(3), or an entity 

that would be a credit repair organization, but for 15 U.S.C. 1679a(3)(B)(i). 

(c) Direct dispute address. A furnisher is required to investigate a direct dispute only

if a consumer submits a dispute notice to the furnisher at: 

(1) The address of a furnisher provided by a furnisher and set forth on a

consumer report relating to the consumer; 

(2) An address clearly and conspicuously specified by the furnisher for

submitting direct disputes that is provided to the consumer in writing or electronically (if 

the consumer has agreed to the electronic delivery of information from the furnisher); or 

(3) Any business address of the furnisher if the furnisher has not so specified

and provided an address for submitting direct disputes under paragraphs (c)(1) or (2) of 

this section.

(d) Direct dispute notice contents. A dispute notice must include:

(1) Sufficient information to identify the account or other relationship that is

in dispute, such as an account number and the name, address, and telephone number of 

the consumer, if applicable;

(2) The specific information that the consumer is disputing and an explanation

of the basis for the dispute; and 

(3) All supporting documentation or other information reasonably required by

the furnisher to substantiate the basis of the dispute. This documentation may include, for 

example: a copy of the relevant portion of the consumer report that contains the allegedly 

inaccurate information; a police report; a fraud or identity theft affidavit; a court order; or 

account statements.

(e) Duty of furnisher after receiving a direct dispute notice. After receiving a dispute

notice from a consumer pursuant to paragraphs (c) and (d) of this section, the furnisher must: 

(1) Conduct a reasonable investigation with respect to the disputed

information; 

(2) Review all relevant information provided by the consumer with the

dispute notice; 

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(3) Complete its investigation of the dispute and report the results of the

investigation to the consumer before the expiration of the period under section 611(a)(1) 

of the FCRA (15 U.S.C. 1681i(a)(1)) within which a consumer reporting agency would 

be required to complete its action if the consumer had elected to dispute the information 

under that section; and 

(4) If the investigation finds that the information reported was inaccurate,

promptly notify each consumer reporting agency to which the furnisher provided 

inaccurate information of that determination and provide to the consumer reporting 

agency any correction to that information that is necessary to make the information 

provided by the furnisher accurate. 

(f) Frivolous or irrelevant disputes.

(1) A furnisher is not required to investigate a direct dispute if the furnisher

has reasonably determined that the dispute is frivolous or irrelevant. A dispute qualifies 

as frivolous or irrelevant if: 

(i) The consumer did not provide sufficient information to investigate

the disputed information as required by paragraph (d) of this section; 

(ii) The direct dispute is substantially the same as a dispute previously

submitted by or on behalf of the consumer, either directly to the furnisher or 

through a consumer reporting agency, with respect to which the furnisher has 

already satisfied the applicable requirements of the Act or this section; provided, 

however, that a direct dispute is not substantially the same as a dispute previously 

submitted if the dispute includes information listed in paragraph (d) of this section 

that had not previously been provided to the furnisher; or 

(iii) The furnisher is not required to investigate the direct dispute

because one or more of the exceptions listed in paragraph (b) of this section 

applies.

(2) Notice of determination. Upon making a determination that a dispute is

frivolous or irrelevant, the furnisher must notify the consumer of the determination not 

later than five business days after making the determination, by mail or, if authorized by 

the consumer for that purpose, by any other means available to the furnisher. 

(3) Contents of notice of determination that a dispute is frivolous or

irrelevant. A notice of determination that a dispute is frivolous or irrelevant must include 

the reasons for such determination and identify any information required to investigate 

the disputed information, which notice may consist of a standardized form describing the 

general nature of such information.

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ATTACHMENT E

15 U.S.C. § 1681i(a)(1) Reinvestigations of Disputed Information

(1) Reinvestigation Required

(A) In general. Subject to subsection (f), and except as provided in subsection

(g) if the completeness or accuracy of any item of information contained in a consumer’s

file at a consumer reporting agency is disputed by the consumer and the consumer

notifies the agency directly, or indirectly through a reseller, of such dispute, the agency

shall, free of charge, conduct a reasonable reinvestigation to determine whether the

disputed information is inaccurate and record the current status of the disputed

information, or delete the item from the file in accordance with paragraph (5), before the

end of the 30-day period beginning on the date on which the agency receives the notice of

the dispute from the consumer or reseller.

(B) Extension of period to reinvestigate. Except as provided in subparagraph

(c), the 30-day period described in subparagraph (A) may be extended for not more than 

15 additional days if the consumer reporting agency receives information from the 

consumer during that 30-day period that is relevant to the reinvestigation. 

(C) Limitations on extension of period to reinvestigate. Subparagraph (B)

shall not apply to any reinvestigation in which, during the 30-day period described in 

subparagraph (A), the information that is the subject of the reinvestigation is found to be 

inaccurate or incomplete or the consumer reporting agency determines that the 

information cannot be verified. 

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