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On February 23, 2015, the Consumer Financial Protection Bureau (CFPB) announced two separate enforcement actions against Citibank, N.A., its affiliates, and two debt collection law firms, for alleged illegal debt sales and debt collection practices.

Debt Sales Enforcement Action

In the first enforcement action, the CFPB alleges that Citibank, N.A., violated the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act in connection with its sale of debt to third parties.  Specifically, the CFPB alleges Citibank, N.A.:

  • Overstated the annual percentage rate (APR) for 128,809 accounts sold to sixteen debt buyers, resulting in consumers paying approximately $4.89 million to debt buyers who used an inflated APR of more than 1 percent; and
  • Delayed sending debt buyers nearly 14,000 payments made by consumers, totaling nearly $1 million, resulting in consumers enduring debt collection efforts after debts were paid.

Pursuant to the administrative consent order entered by the CFPB to resolve the alleged illegal debt sales practices, Citibank, N.A., must:

  • Refund the approximate $4.89 million to nearly 2,100 consumers that was collected as a result of inflated APRs in excess of 1 percent;
  • Accurately document debt sells;
  • Stop selling debt it is unable to verify;
  • Include language in debt sales contracts that prohibits debt purchasers from reselling the debt;
  • Provide consumers with information about the debts when it sells a debt, such as the name of the original creditor, the credit agreement, and recent account statements; and
  • Pay a $3 million civil penalty.

Debt Collection/Affidavits Enforcement Action

In addition to the alleged illegal debt sales enforcement action, the CFPB also announced a second enforcement action against Citibank, N.A., two of its affiliates—Department Stores National Bank and CitiFinancial Servicing, LLC—and two debt collection law firms—Faloni & Associates, LLC and Solomon & Solomon, P.C.—for altering affidavits filed in debt collection lawsuits.

The CFPB alleges that Citibank, N.A., and its affiliates provided to the law firms sworn affidavits attesting to the accuracy of the debt allegedly owed.  According to the CFPB, in violation of the Fair Debt Collection Practices Act (FDCPA), the law firms then altered the dates of the affidavits and/or the amount of the debt allegedly owed and filed the affidavits in court actions initiated against the consumers to collect the debts.

The CFPB entered into separate consent orders with Citibank, N.A., its affiliates, and the law firms to resolve the alleged violations of the FDCPA.  As part of those consent orders, Citibank, N.A., is required to comply with a separate New Jersey state court order (resulting from the filing of an altered affidavit), that required Citibank, N.A., to refund $11 million to consumers and stop collecting on an additional $34 million in in debts.  In addition, Solomon & Solomon, P.C., must pay a $65,000 civil penalty and Faloni & Associates, LLC, must pay a $15,000 civil penalty.

These enforcement actions are the latest in a series of CFPB enforcement actions related to debt collection practices.  The CFPB has made clear that one of its top enforcement priorities relates to consumer debt collection.  Given the number of CFPB enforcement actions related to debt collection, and the likelihood that this area will continue to be a CFPB enforcement priority, financial services companies, debt purchasers, and collectors must ensure that their practices are in compliance with the FDCPA and other applicable laws.

You can view debt sales consent order here:

You can view the Citibank, N.A., debt collection/affidavit consent order here:

You can view the Solomon & Solomon, P.C., consent order here:

You can view the Faloni & Associates, LLC, consent order here:


Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

Zane Gilmer is a member of the firm’s litigation practice group.  His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce.  Zane works out of the firm’s Denver office and he can be reached at or 303.376.8416.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.