On September 23, the Consumer Financial Protection Bureau (CFPB) announced that it filed suit against a credit repair company in the United States District Court for the Central District of California, for alleged violations of the Consumer Financial Protection Act (CFPA), and the Telemarketing and Consumer Fraud and Abuse Prevention Act and its implementing regulation, the Telemarketing Sales Rule.
According to the complaint, the company operated an “ongoing, unlawful credit repair business” that charged consumers unlawful advance fees and misrepresented the costs and benefits of its services. The company allegedly often reached out to consumers who had inquired about a loan on a lending website, and consumers called the company after seeing information online about its credit repair services. During its initial call with a consumer, the company allegedly represented to the consumer that he or she must pay an initial fee, despite marketing these consultations as “free.” Consumers who elected to continue working with the company were then allegedly charged a monthly fee of $89.99.
The complaint also alleges that the company misrepresented to consumers that it could remove virtually any negative information from a consumer’s credit report. The company also represented that it offered a money-back guarantee, without disclosing the significant limitations on that guarantee.
The CFPB requested that the Court permanently enjoin the company from committing further violations of consumer financial laws; award damages and other monetary relief to redress injury to consumers; and award civil penalties to the Bureau.
The post CFPB Files Action Against Credit Repair Company, Seeking Injunction and Penalties appeared first on Consumer Finance Insights (CFI).