Consumer Finance Insights
November 16, 2017

CFPB Files Suit Against National Debt-Settlement Services Provider For Allegedly Misleading Consumers

On November 8, 2017, the Consumer Financial Protection Bureau (“CFPB”) announced it filed suit in federal court in California against a national debt-settlement services provider and its CEO based on alleged violations of the Consumer Financial Protection Act, 12 U.S.C. §§ 5531, 5536(a), 5564, 5565, the Telemarketing Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§  6102(c), 6105(d), and the Telemarketing Sales Rule, 16 C.F.R. pt. 310.

In its complaint, the CFPB alleges that the company took advantage of consumers and engaged in unfair, deceptive, and abusive practices by misleading consumers about its fees, making false claims about its ability to negotiate with creditors, including creditors it knew would not negotiate, and failing to disclose consumers’ rights to funds if they left the debt-settlement program.  The CFPB also alleges that the company approved consumers for enrollment in its debt-settlement programs even if they were not delinquent on any debts.

The CFPB seeks monetary relief, injunctive relief, disgorgement of ill-gotten gains, and civil money penalties.