BounceBack, Inc. and Gale Krieg
On December 9, 2020, the Bureau filed a lawsuit in the United States District Court for the Western District of Missouri against BounceBack, Inc. BounceBack, based in Kansas City, Missouri, operates bad-check pretrial-diversion programs on behalf of more than 90 district attorneys’ offices throughout the United States. The Bureau alleges that since at least 2015, in the course of administering these bad-check pretrial-diversion programs, BounceBack used district-attorney letterheads to threaten more than 19,000 consumers with prosecution if they did not pay the amount of the check, enroll and pay for a financial-education course, and pay various other fees. BounceBack did not reveal to consumers that BounceBack—and not district attorneys—sent the letters, or that district attorneys almost never prosecuted these cases, even against consumers who ignored BounceBack’s threats. In fact, in most cases, BounceBack did not refer cases for prosecution at all. BounceBack’s letters also failed to include disclosures required under the FDCPA. The Bureau alleges that BounceBack’s conduct violated the FDCPA, was deceptive under both the FDCPA and the CFPA, and that its violations of the FDCPA constituted violations of the CFPA.
On August 27, 2021, the Bureau filed an amended complaint, which also names BounceBack’s president and majority owner, Gale Krieg, and alleges that Krieg exercises control over BounceBack and violated the CFPA because, among other things, he materially participated in and oversaw BounceBack’s deceptive activities. On September 21, 2021, the Bureau filed a proposed stipulated final judgment and order to resolve the lawsuit. If approved by the court, the stipulated judgment and order would require BounceBack and Krieg to pay about $1.4 million to redress consumers, which amount would be suspended based upon defendants’ demonstrated inability to pay more upon BounceBack’s and Krieg’s compliance with the certain provisions of the judgment and order including paying a $30,000 civil money penalty. The order would also permanently ban BounceBack and Krieg from, inter alia, engaging in debt collection related to any consumer financial product or service.