CFPB Enters Settlement with Credit Repair Conglomerate for $2.7 Billion

On August 28, the CFPB announced ​it reached a proposed settlement agreement with a credit repair conglomerate for $2.7 billion. The parties await approval of the proposed settlement by the U.S. District Court for the District of Utah.

In its amended​ complaint filed last August, the CFPB alleged that the defendant companies collected advance fees for credit repair services through telemarketing in violation of federal law, namely the Telemarketing Sales Rule which requires credit repair companies to wait until six months after they provide the consumer with documentation reflecting that the promised results were achieved, before they request or receive payment from the consumer.​

As part of the proposed settlement agreement, the defendants agreed (1) to cease conducting or selling credit repair services that others marketed through telemarketing for 10 years; (2) to send a notice of the settlement to any remaining enrolled customers who were previously signed up through telemarketing; (3) to pay a $2.7 billion judgement for redress; and (4) to pay $64 million in civil penalties.