CFPB Files Complaint and Proposed Order Against Debt Relief and Credit Repair Company, Seeking Permanent Ban

On June 29, 2021, the Consumer Financial Protection Bureau (CFPB) announced it filed a proposed stipulated order with a Maryland-based debt relief and credit repair company concerning alleged violations of the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act (CFPA). If accepted by the court, the order would ban the company and its owners and its executives from the industry. It would also impose a civil penalty of $150,001 on the company. The proposed order comes on the heels of a joint complaint the CFPB and State of Georgia filed against the company on June 28, 2021.

The CFPB specifically alleges that the company solicited consumers by making false promises that its services would eliminate credit card debt and improve credit scores. First, the CFPB alleges that the company made unsubstantiated claims in their marketing materials about their ability to invalidate, eliminate, or lower consumer debt, despite failing to provide evidence showing they had done so in the past. Next, the CFPB alleges the company encouraged consumers to stop paying their debts while collecting upfront fees of up to 40% of the debt a consumer owed. Finally, the CFPB alleged the company falsely represented it had a “credit restoration” team, and failed to collect or track consumer credit scores during or after the time they were enrolled in the program.

In addition to the relief described above, the order would impose a suspended judgment for $30 million in consumer redress.