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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

CREDIT PROTECTION ASSOCIATION, 

LP, a limited partnership,

Defendant.

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Case No.

COMPLAINT FOR CIVIL PENALTIES, PERMANENT INJUNCTION, 

AND OTHER EQUITABLE RELIEF

Plaintiff, the United States of America, acting upon notification and authorization to the 

Attorney General by the Federal Trade Commission (“FTC” or “Commission”), for its 

Complaint, alleges:

1. Plaintiff brings this action under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of 

the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a),

and 57(b), and Section 621(a) of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s(a), 

to obtain monetary civil penalties and permanent injunctive or other relief for Defendant’s 

violations of the FTC Act, 15 U.S.C. § 45(a); the FCRA, 15 U.S.C. §§ 1681-1681x; and the 

Duties of Furnishers of Information to Consumer Reporting Agencies (“Furnisher Rule”), 16 

C.F.R. § 660, issued pursuant to Section 623(e)(1) of the FCRA, 15 U.S.C. § 1681s-2(e)(1), and 

recodified as Duties of Furnishers of Information, 12 C.F.R. § 1022, subpart E.

JURISDICTION AND VENUE

2. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C. 

§§ 1331, 1337(a), 1345, and 1355, and under 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a), and 

1681s(a).

3. Venue is proper in this district under 28 U.S.C. §§ 1391(b)-(c), 1395(a), and 15 

U.S.C. § 53(b).

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PLAINTIFF

4. This action is brought by the United States of America on behalf of the FTC. The 

FTC is an independent agency of the United States government given statutory authority and 

responsibility by the FTC Act, 15 U.S.C. §§ 41-58. The FTC is charged with enforcing Section 

5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or 

affecting commerce; and the FCRA, 15 U.S.C. §§ 1681-1681x, which imposes duties upon 

consumer reporting agencies and those who furnish information to a consumer reporting agency 

or use information obtained from a consumer reporting agency. Pursuant to the FCRA, the FTC 

promulgated and enforces the Furnisher Rule, 16 C.F.R. § 660, effective August 1, 2005, 

recodified as promulgated by the Consumer Financial Protection Bureau (“CFPB”) at 12 C.F.R. 

§ 1022, Subpart E, effective July 21, 2011. 

DEFENDANT

5. Defendant Credit Protection Association, LP (“CPA”), is a Texas limited 

partnership with its principal place of business at 13355 Noel Road, Suite 2100, Dallas, Texas 

75240. CPA transacts or has transacted business in this district.

COMMERCE

6. At all times material to this Complaint, Defendant has maintained a substantial 

course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 

15 U.S.C. § 44.

THE FAIR CREDIT REPORTING ACT AND THE FURNISHER RULE

7. The FCRA was enacted in 1970, became effective on April 25, 1971, and has 

been in force since that date. The Fair and Accurate Credit Transactions Act, Pub. L. No. 108-

159, 117 Stat. 1952, amended the FCRA in December 2003, and the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376, amended the FCRA 

in July 2010.

8. Section 621 of the FCRA, 15 U.S.C. § 1681s, authorizes the Commission to use 

all of its functions and powers under the FTC Act to enforce compliance with the FCRA by all 

persons subject thereto except to the extent that enforcement specifically is committed to some 

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other governmental agency, irrespective of whether the person is engaged in commerce or meets 

any other jurisdictional tests set forth by the FTC Act.

9. The FCRA imposes obligations on consumer reporting agencies (“CRAs”) that 

assemble and evaluate consumer reports, furnishers of information to CRAs, and those that 

obtain information from CRAs. The FCRA required the Commission to establish regulations to 

implement requirements for furnishers. The Commission published regulations related to 

furnishers at 16 C.F.R. § 660 (“Furnisher Rule”). In July 2011, the Dodd-Frank Act transferred 

rulemaking authority under the FCRA to the CFPB, and the CFPB republished the Part 660

regulations at 12 C.F.R. § 1022, at Subpart E and Appendix E to part 1022. The Commission 

enforces the CFPB regulations with respect to entities over which the Commission has 

jurisdiction under the FCRA.

10. The Furnisher Rule requires furnishers to establish and implement reasonable 

written policies and procedures regarding the accuracy and integrity of consumer information 

they furnish to a CRA, 16 C.F.R. § 660.3, recodified at 12 C.F.R. § 1022.42. This provision of 

the Furnisher Rule was intended to “promote the accuracy of information reported to consumer 

reporting agencies.” H.R. REP. NO. 108-263, at 44 (2003). 

11. The Furnisher Rule requires furnishers to conduct a reasonable investigation of 

disputes they receive from consumers concerning the accuracy of reported credit information

(“direct disputes”) and report the results of the investigation to consumers within a specified time 

period, 16 C.F.R. § 660.4(e)(1) and (e)(3), recodified at 12 C.F.R. § 1022.43(e)(1) and (e)(3). 

DEFENDANT’S BUSINESS PRACTICES

12. CPA is a third-party debt collector that primarily collects on behalf of cable 

service providers. It contacts consumers throughout the United States to attempt to collect 

unpaid balances for cable services and to recover unreturned cable equipment. As part of its 

practices, CPA regularly furnishes consumer account information to major CRAs, including 

Experian, TransUnion, and Equifax. Accordingly, it is a “furnisher of information” under the 

FCRA, 15 U.S.C. § 1681s-2(a)(2)(A), and is required to comply with the Furnisher Rule.

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CPA’s Written Accuracy and Integrity Policies and Procedures

13. The Furnisher Rule states that furnishers must establish and implement reasonable 

written policies and procedures regarding the accuracy and integrity of the consumer information 

that they furnish to a CRA. 16 C.F.R. § 660.3(a), recodified at 12 C.F.R. § 1022.42(a). The 

Rule expressly requires furnishers to consider the guidelines in Appendix E of the Rule, and 

review their policies and procedures periodically. 16 C.F.R. § 660.3(b) and (c), recodified at 12 

C.F.R. § 1022.42(b) and (c). 

14. In June 2010, CPA adopted a three page document that is entitled “Consumer 

Information Reported to Consumer Reporting Agencies” and describes policies that were 

intended to comply with CPA’s obligations under the Furnisher Rule. In establishing and 

implementing its written policies, CPA failed to consider and incorporate the appropriate 

guidelines from Appendix E of the Furnisher Rule. Specifically, CPA failed to:

a) adopt policies reasonably designed to promote the objective of conducting 

reasonable investigations of consumer disputes and taking appropriate actions based on

the outcome of such investigations. 12 C.F.R Part 1022, Appendix E, Section I, 

Subsection (b)(3); and

b) address the following specific, appropriate components in developing its policies 

and procedures:

i) 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. Appendix E, 

Section III, subsection (c);

ii) training staff that participates in activities related to the furnishing of 

information about consumers to consumer reporting agencies to implement the policies 

and procedures. Appendix E, Section III, subsection (e);

iii) conducting reasonable investigations of disputes. Appendix E, Section III, 

subsection (i); and

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iv) 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. Appendix E, Section III, subsection (l). 

15. In addition to failing to establish and implement reasonable written policies and 

procedures regarding the accuracy or integrity of furnished information, CPA also failed to 

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

their effectiveness. CPA’s failures could lead to CPA reporting inaccurate information to CRAs.

CPA’s Policies and Procedures for Direct Dispute Investigations

16. CPA publishes an address at which consumers can file direct disputes regarding 

the accuracy of account information CPA has furnished to the CRAs, and regularly receives 

dispute notices from consumers. CPA has employees in its “dispute resolution” department that 

have the authority to resolve disputes by modifying or deleting account information if the 

consumer submits supporting documentation that the employees deem suitable (e.g. canceled 

checks showing payments). These employees receive insufficient training about the FCRA or 

CPA’s duty to conduct reasonable investigations of direct disputes.

17. If disputes are not resolved by employees at the initial processing stage, CPA 

transmits the dispute information to its clients, the original creditors, for handling and resolution. 

CPA uses an information system known as “E-Tech” to transmit dispute information to clients 

and track its debt collection accounts. Employees assign an E-Tech dispute code to the account, 

such as Code 2 (“Debt Paid”), Code 4 (“Items Returned”), Code 5 (“Denial of Service”), or Code 

6 (“Amount Due is Incorrect”). The employee may also enter notes describing the dispute into a 

notes field. The notes vary in terms of the level of detail but are typically brief. Employees 

receive insufficient training about how to choose appropriate dispute codes other than a basic 

introduction to the codes, and insufficient training about the level of detail to use in the notes 

field.

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18. E-Tech does not have the capability of linking scanned documents to accounts, 

so CPA does not transmit copies of dispute letters or other written documents submitted by 

consumers through E-Tech. In many instances the only information a client will have about a 

direct dispute are the dispute codes and the E-Tech notes. CPA routinely destroys dispute letters 

and other documentation submitted by consumers, even when the dispute has not been resolved. 

19. CPA employees who process written disputes have authority to refer a dispute to 

a client services representative (“CSR”). CSRs are designated to interact with clients, and 

sometimes help resolve disputes. CPA has no written policies specifying when its employees

should involve CSRs. Employees also occasionally transmit dispute letters or other documents 

to the CSRs outside the E-Tech system, but receive insufficient guidance or training about when 

to do so. CPA does not require employees to document when they transmit documents outside 

of E-Tech or refer cases to CSRs, and does not require CSRs to document their interactions with 

clients. 

20. Other than sometimes providing CSRs to assist, CPA relies on its clients to 

conduct investigations and resolve disputes. In many instances CPA will not know what, if any, 

steps its client took to investigate disputes or the basis for the client’s determination; the client 

will simply inform CPA that the account information has been validated, or should be modified 

or deleted.

21. Although CPA managers occasionally review dispute files, CPA has no 

systematic auditing program to determine whether its employees are properly handling disputes. 

Because of CPA’s document destruction and lack of file documentation requirements, in most

instances it would be impossible for CPA to determine whether the dispute codes and notes fairly 

reflected the consumer’s dispute, or to reconstruct what, if any, steps its employees took outside 

of the E-Tech system to transmit information to clients or investigate disputes.

22. Because of CPA’s failure to consider the guidelines in Appendix E to the 

Furnisher Rule when establishing and implementing its written policies regarding the accuracy 

and integrity of furnished information, CPA’s actual policies and procedures for investigations of 

direct disputes are inadequate and unreasonable given the nature, size, complexity, and scope of 

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its furnishing activities. CPA’s policies and procedures do not provide for adequate training or 

monitoring of employees who participate in direct dispute investigations, and its routine 

destruction of documents related to disputes and failure to implement reasonable file 

documentation policies prevent it from conducting meaningful review of its investigation 

practices.

23. In numerous instances, consumers contacted by CPA have disputed the balances 

the company is trying to collect. Consumers have told CPA that they paid the account balances, 

that account balances were inaccurate for various reasons, or that they never had the services in 

the first place. Moreover, consumers have complained that CPA continued to attempt to collect 

on inaccurate account information despite multiple disputes.

Post-Investigation Notification of Consumers

24. The Furnisher Rule requires furnishers to complete direct dispute investigations 

and notify consumers of the results within the same time period as mandated for CRA 

investigations of disputes, 30 days. 16 C.F.R. § 660.4(e)(3), recodified at 12 C.F.R. 

§ 1022.43(e)(3). CPA has no policy in place to comply with this requirement. Once CPA is 

notified by the creditor-client that disputed account information has been confirmed, or should be 

modified or deleted, CPA’s practice is to update its internal records accordingly, and the system 

is supposed to then automatically provide updates to CRAs. In some instances, when required 

by state law or in cases where the account has been escalated to CPA’s legal department because 

of involvement of an attorney or the threat of a lawsuit, CPA will send a letter notifying the 

consumer of the action taken. However, CPA has no policy requiring that consumers be notified 

about the results of the investigation in every case involving an FCRA-qualifying dispute. In 

numerous instances, CPA has simply deleted account information after a dispute, without 

informing the consumer of the action or the results of the investigation. Because consumers are 

not notified about the results of their dispute investigations, they may not know to avail 

themselves of their additional rights under the FCRA, including the option to dispute inaccurate 

or incomplete information directly to CRAs and to add statements of dispute to their credit files 

and future credit reports. 

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COUNT I

Lack of Reasonable Written Policies and Procedures

25. As described in paragraphs 14-23, CPA has failed to:

a) 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;

b) consider and incorporate the appropriate guidelines set forth in Appendix 

A to 16 C.F.R. Part 660 and Appendix E to 12 C.F.R. Part 1022 in developing such 

policies and procedures; and 

c) review such policies and procedures periodically and update them as 

necessary to ensure their continued effectiveness.

26. By and through the acts and practices described in paragraphs 14-23 and 25, CPA 

has violated 16 C.F.R. § 660.3, recodified at 12 C.F.R. §1022.42.

27. Pursuant to Section 621(a)(1) of the FCRA, 15 U.S.C. § 1681s(a)(1), the acts and 

practices described in paragraphs 14-23 and 25 also constitute unfair or deceptive acts or 

practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

COUNT II

Failure to Report Results of Investigation

28. Through the acts and practices described in paragraph 24, CPA, after receiving 

direct disputes from consumers, as that term is defined in the Furnisher Rule at 16 C.F.R. 

§ 660.2(b) and 12 C.F.R. § 1022.41(b), has failed to 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 FCRA, 15 U.S.C. § 1681i(a)(1). 

29. By and through the acts and practices described in paragraphs 24 and 28, CPA has 

violated Section 623(a)(8)(E)(iii) of the FCRA, 15 U.S.C. § 1681s-2(a)(8)(iii), and 16 C.F.R. 

§ 660.4(e)(3), recodified at 12 C.F.R. § 1022.43(e)(3).

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30. Pursuant to Section 621(a)(1) of the FCRA, 15 U.S.C. § 1681s(a)(1), the acts and 

practices described in paragraphs 24 and 27 also constitute unfair or deceptive acts or practices 

in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

CONSUMER INJURY

31. Consumers have suffered and will continue to suffer substantial injury as a result 

of Defendant’s violations of the FCRA and the FTC Act. In addition, Defendant has been 

unjustly enriched as a result of their unlawful acts or practices. Absent injunctive relief by this 

Court, Defendant is likely to continue to injure consumers, reap unjust enrichment, and harm the 

public interest.

INJUNCTION FOR VIOLATIONS OF THE FCRA AND THE FTC ACT

32. Under Section 621(a) of the FCRA, 15 U.S.C. § 1681s(a), and Section 13(b) of 

the FTC Act, 15 U.S.C. § 53(b), this Court is authorized to issue a permanent injunction to 

prevent continued violations of the FCRA or the FTC Act. 

EQUITABLE RELIEF FOR VIOLATIONS OF THE FCRA AND THE FTC ACT

33. Under Section 621(a) of the FCRA, 15 U.S.C. § 1681s(a), and Section 13(b) of 

the FTC Act, 15 U.S.C. § 53(b), this Court is authorized to issue all equitable and ancillary relief 

as it may deem appropriate in the enforcement of the FCRA and the FTC Act, including the 

ability to order rescission or reformation of contracts, restitution, the refund of monies paid, and 

disgorgement to deprive a wrongdoer of ill-gotten gain. 

CIVIL PENALTIES FOR VIOLATIONS OF THE FCRA

34. Section 621(a)(2)(A) of the FCRA, 15 U.S.C. § 1681s(a)(2)(A), authorizes the 

Court to award monetary civil penalties in event of a knowing violation, which constitutes a 

pattern or practice of violations. CPA’s violations of Section 623 of the FCRA and the Furnisher 

Rule, as alleged in this Complaint, were knowing and constituted a pattern or practice of 

violations. As specified by the Federal Civil Penalty Inflation Adjustment Act of 1990, 28 

U.S.C. § 2861, as amended, the Court is authorized to award a penalty of not more than $3500 

per violation.

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35. Each instance in which CPA has failed to comply with the FCRA and the 

Furnisher Rule in one or more of the ways described above constitutes a separate violation of the 

FCRA for the purpose of assessing monetary civil penalties under Section 621 of the FCRA. 

Plaintiff seeks monetary civil penalties for every separate violation of the FCRA.

PRAYER FOR INJUNCTIVE AND MONETARY RELIEF

WHEREFORE, Plaintiff requests that this Court, pursuant to 15 U.S.C. §§ 45(a), 

45(m)(1)(A), 53(b), and 1681s, and pursuant to the Court’s own equitable powers: 

1) Enter judgment against Defendant and in favor of Plaintiff for each law violation alleged 

in this Complaint;

2) Enter a permanent injunction against Defendant to prevent future violations of the FCRA 

and the FTC Act, as alleged herein;

3) Award Plaintiff monetary civil penalties from Defendant for each violation of the FCRA 

as alleged in this Complaint;

4) Order Defendant to pay the costs of this action; and

5) Award Plaintiff such additional relief as the Court may deem just and proper.

Dated: May 9, 2016

OF COUNSEL:

JONATHAN E. NUECHTERLEIN

General Counsel

DAMA J. BROWN

Regional Director

Southwest Region

JASON C. MOON

Texas Bar No. 24001188

FOR THE UNITED STATES OF AMERICA:

BENJAMIN C. MIZER

Principal Deputy Assistant Attorney General

Civil Division

United States Department of Justice 

JONATHAN F. OLIN

Deputy Assistant Attorney General 

MICHAEL S. BLUME

Director

Consumer Protection Branch

ANDREW E. CLARK

Assistant Director

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ANGELEQUE P. LINVILLE

Texas Bar No. 24058793

Attorneys, Southwest Region

Federal Trade Commission

1999 Bryan Street, Suite 2150

Dallas, Texas 75201

(214) 979-9378; jmoon@ftc.gov

(214) 979-9381; alinville@ftc.gov

(214) 953-3079; (fax)

 s/ Jacqueline Blaesi-Freed______________ 

Jacqueline Blaesi-Freed

Kansas Bar No. 25455

Trial Attorney

Dep’t of Justice, Consumer Protection Branch

450 5th Street, NW 

Washington DC 20001

(202) 353-2809; jacqueline.m.blaesi-freed@usdoj.gov

(202) 514-8742 (fax)

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