On January 9, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had filed a complaint against a constellation of companies for allegedly requesting credit reports without a permissible purpose in order to deceptively market sham student-loan debt relief services to consumers, in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531 and 5536, the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681s, and the Telemarketing Sales Rule (TSR), 16 C.F.R. Part 310.
The CFPB alleged that two of the companies, both lenders, obtained consumer-report information for millions of consumers with no intention to lend to the consumers. Rather, the companies purportedly intended to provide the information to affiliated student-loan debt-relief companies for marketing purposes. The CFPB further alleged that these student-loan debt-relief companies collected fees before services were performed in violation of the TSR and misrepresented to consumers that their interest rates would be reduced and their loans would be serviced by the Department of Education in violation of the CFPA. The CFPB also alleged that a number of individuals provided substantial assistance to the operation and were thus individually liable.
The CFPB’s complaint seeks an injunction to prevent the companies from participating in debt-relief services, as well as consumer relief, damages, civil penalties, disgorgement, rescission and reformation of contracts, and enforcement costs.
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