Facts

Synchrony Bank is a Utah-based and headquartered federal savings association with locations throughout California. It has call centers within and outside of the United States with employees who call consumers in an attempt to collect assumed consumer debts. After 2014, the Los Angeles County District Attorney's Consumer Protection Division began to investigate Synchrony's debt collection practices. As part of the Debt Collection Task Force, which also includes the District Attorney's offices in the Counties of San Diego, Riverside and Santa Clara, it filed suit against the bank.

PLAINTIFFS' CONTENTIONS: Plaintiffs, the District and Deputy Districts of the Counties, contended that defendant Synchrony engaged in unlawful debt collections acts and practices in violation of California's Rosenthal Fair Debt Collection Practices Act as well as the Federal Debt Collection Practices Act. Not only did Synchrony violate the statutes by engaging in unreasonably frequent or harassing phone calls in connection with debt collection activities, it continued its harassing activities even when consumers indicated they no longer wished to receive calls, or when they when they told Synchrony they had the wrong number. Plaintiff George Gascon, the Los Angeles County District Attorney, specifically noted that repeated phone calls from debt collectors intended to annoy, abuse, or harass consumers is illegal and wrong.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions and made no admission of wrongdoing.

Result

Under a negotiated judgment, Synchrony was ordered to pay a total of $3.5 million. This amount includes: $2 million in civil penalties, which includes $500,000 to each of the four District Attorney's offices involved; $975,000 in investigative costs; $525,000 in restitution to be distributed to a nonprofit charitable organization supporting advances in the public's interest. Also under the settlement, Synchrony is required to implement and maintain policies and procedures that prevent harassing debt collection calls for four years after the judgment date.