On December 1, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it filed suit against a Massachusetts debt settlement and relief company over alleged violations of the Telemarketing Sales Rule (TSR) and Consumer Financial Protection Act (CFPA) in connection with the company’s debt-settlement and debt relief services.
The complaint filed in the U.S. District Court for the District of Massachusetts, alleges that the company used abusive and deceptive acts or practices in violation of the TSR by requesting and receiving up-front fees before the company performed the services promised. Additionally, the CFPB alleges that the company misrepresented that it would not charge fees for its services until after the debt was settled and consumers made a payment under that settlement. The complaint further alleges that the company did not disclose the total amount of money that each consumer would have to accumulate to pay off the debt before the company would make a settlement offer. The CFPB alleges that these violations of the TSR also constitute violations of the CFPA.
The complaint seeks injunctive relief, monetary damages, civil penalties, and costs associated with the action.