On August 8, 2024, The CFPB entered into a proposed consent order with a software company and the company’s CEO, resolving allegations that defendants aided credit repair companies in charging illegal upfront fees. Back in January 2022, the CFPB filed an amended complaint against defendants, alleging violations of the Telemarketing Sales Rule, 16 C.F.R. § 310.3(b), and section 1036 of the Consumer Financial Protection Act, 12 U.S.C. § 5536(a)(1)(A). According to the CFPB, the company and its CEO provided assistance and encouraged credit-repair businesses to charge unlawful advance fees to their consumers through the use of telemarketing scripts, marketing materials, training materials on credit repair, and advice on how and when to collect fees. The Bureau further alleged that the CEO was individually liable for the Company’s violations because of his participation and reckless disregard of the Company’s actions.
Under the consent order, defendants agreed to pay $3 million in civil penalties and to revise their tools to remove support for telemarketing and upfront fees.
The United States District Court Central District of California entered a final judgment on August 12, 2024, granting the proposed order.