Blog Enforcement Watch June 09, 2022

CFPB Bans Student Debt Relief Operator From Industry

On June 9, 2022, the CFPB announced that it had reached an agreement with the former owner of a student-loan debt relief company banning the owner from the debt-relief industry. The CFPB filed a complaint in U.S. District Court for the Southern District of California alleging that the individual violated the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536(a), 5564, and 5565, by debiting consumers’ bank accounts without prior authorization and by engaging in unfair acts or practices related to these withdrawals.  Specifically, the CFPB alleged that the individual obtained customers’ student-loan account and billing information from his prior, defunct student debt relief operation and continued to debit “processing fees” on a monthly basis through a new corporation without the consumers’ permission. ​

The stipulated order entered the same day requires the individual to pay $175,000 in civil monetary penalties and permanently bans him from offering or providing any debt relief products or services.

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