Bluestem companies settle with Bureau

The Bureau of Consumer Financial Protection has announced that the Bureau and Bluestem Brands, Inc.; Bluestem Enterprises, Inc.; and Bluestem Sales, Inc. (the Bluestem companies) have filed an administrative consent order resolving the Bureau’s allegations that after consumers made payments to the Bluestem companies on debts that the companies had already sold, the Bluestem companies substantially delayed sending those payments to the third-party debt buyers.

The Bureau found that the Bluestem companies violated the Consumer Financial Protection Act of 2010 by unfairly delaying the transfer of payments that customers had made to the Bluestem companies on charged-off accounts to the third-party debt buyers who had purchased those accounts. The Bureau found that between 2013 and 2016, Bluestem delayed forwarding payments for more than 31 days in 18,000 instances; in 3,500 of those instances, Bluestem delayed forwarding payments for more than a year. These delays likely subjected customers to misleading collection activity, including collection activity on accounts that they had completely paid off.

The Bluestem companies are now required to improve their processes to timely identify and forward customer payments on accounts sold to third parties, prevent consumers from making payments by phone or on the companies’ websites on sold accounts, and notify customers who do make payments to the Bluestem companies on sold accounts that their accounts have been sold. The companies will also pay a civil money penalty of $200,000.