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OK law firms and president pay $78.8K for debt collection practices

OK
01/09/2017
Fine Amount: 
$78,800 and $577,135 in restitution
Penalty Type: 
Issued by: 

The Consumer Financial Protection Bureau (CFPB) has taken action against two medical debt collection law firms and their president for falsely representing that letters and calls were from attorneys attempting to collect on a debt when no attorney had yet reviewed the account. The law firms also did not ensure the accuracy of the consumer information they furnished to credit reporting companies and used improperly notarized affidavits in lawsuits filed against consumers. The practices affected thousands of individuals. The CFPB is ordering Works and Lentz, Inc. (Oklahoma City), Works and Lentz of Tulsa, Inc., and their president, Harry A. Lentz, Jr., to provide $577,135 in relief to harmed consumers, correct their business practices, and pay a $78,800 penalty.

According to the CFPB's release, Works and Lentz, Inc. and Works and Lentz of Tulsa, Inc., are debt collection law firms based in Oklahoma City, and Tulsa, Oklahoma. Harry A. Lentz, Jr. is the president of both. The firms primarily collect medical debt on behalf of hospitals, doctors, and other healthcare providers in the state of Oklahoma. Annually, the firms attempt collection on approximately 700,000 debts totaling more than $500 million. Like many other debt collectors, the firms collect delinquent accounts and are paid based on how much money they collect.

The CFPB’s investigation found that the firms engaged in illegal debt collection practices. Their standard practices implied lawyers were reviewing the veracity of a consumer’s medical debt when no lawyer had, in fact, reviewed the file. The CFPB order charges the company with violating the Fair Debt Collection Practices Act and the Fair Credit Reporting Act from January 2012 to August 2016. The Bureau found that the firms:

  • sent collection letters implying they were from a lawyer, when no attorneys had reviewed consumer accounts or made any determination as to whether a suit was appropriate before the letters were sent;
  • called consumers and implied a lawyer was involved although no attorney was yet involved;
  • falsified notarization of affidavits in lawsuits against consumers; and
  • furnished information to a credit reporting company without policies to ensure accuracy.

Under the terms of the consent order, the firms and their president must:

  • provide $577,135 in refunds to harmed consumers;
  • stop using deceptive language in letters and collection calls;
  • prohibit the unlawful notarization of affidavits;
  • revise and enhance consumer credit reporting protections;
  • and

  • pay a civil money penalty of $78,800.

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