Some compliance issues seem obvious.
One of the biggest is that you cannot take someone’s money from their bank account without their consent.
According to the Consumer Finance Protection Bureau (CFPB), that is exactly what Enova International did. Enova is a payday and installment lender. It self-reported to the CFPB that between 2010 and 2014, Enova improperly debited millions of dollars from about five thousand accounts.
These debits meant that consumers lost money and in some instances were subject to insufficient funds charges by their banks.
The CFBP, in a consent order, barred Enova from making recurring electronic funds transfers, from a customer’s account, without getting prior valid authorization. And this will cost Enova $3.2 million in the form of a civil penalty.
Those in the receivables management industry have to realize there are a lot of plaintiff’s lawyers out there, who love to sue companies. In addition, there is the CFPB, the Federal Trade Commission (FTC) as well as regulatory agencies in all fifty states.
Taking short cuts, such as not having the proper authorizations, is an invitation for a compliance nightmare. The costs to a company for this kind of problem is enormous. There is the fine (or judgment if a plaintiff wins), the costs of defending an action and the costs of remediation. It is easier and cheaper to simply do it right the first time.