The FDIC recently announced a $1.8 million settlement with a regional bank for allegedly violating Section 5 of the Federal Trade Commission Act. The FDIC claimed that the bank engaged in “deceptive and/or unfair practices related to certain collection fees and collection practices” with regard to collections made under its commercial equipment financing subsidiary. The alleged violations included excessive or sequential calling, charging undisclosed collection fees, disclosure of debt information to non-borrowers, and failure to abide by requests to cease and desist continued collection calls.
For these alleged violations, the bank agreed to the issuance of a consent order with the FDIC, without admitting to or denying these violations. In addition to this settlement, the Bank reportedly paid $1,628,000 in voluntary restitution to 16,902 customers who were charged undisclosed collection fees.