On May 5, the CFPB announced that it has sent payments totaling more than $22 million to approximately 6,500 individuals who were harmed by a Maryland-based debt-relief and credit-repair company that marketed and sold debt-relief and credit-repair services nationwide from 2016 to 2020. In 2021, a federal court entered a stipulated final judgement and order against the company and its executives for allegedly deceiving consumers into hiring the company with false promises to lower or eliminate their credit-card debts and to improve their credit scores in violation of consumer financial protection laws.Continue Reading CFPB, FTC Continue Crack Down on Debt Relief Schemes
On March 18, the U.S. District Court for the Southern District of Texas issued an injunction against a Texas-based credit repair company that allegedly made false promises to remove negative information from credit reports and filed false identity theft reports to explain negative items on credit reports. The court granted an injunction against the company, finding violations of Section 5 of the FTC Act, the Credit Repair Organizations Act, and the Telemarketing and Consumer Fraud and Abuse Prevention Act. The permanent injunction imposes financial restrictions on the defendants and halts their operations.
Continue Reading FTC, DOJ Halt Credit Repair Operation Over Deceptive Practices
On February 28, the FTC announced that the operators of an alleged credit card interest rate reduction scam will be permanently banned from the debt relief industry as part of court orders resolving charges by the FTC and the Florida AG. The FTC and Florida AG alleged that the operators engaged in deceptive and abusive practices violating the FTC Act, the Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act in selling credit card interest rate reduction services to consumers. According to the joint complaint, the operators made telephone calls claiming to permanently and substantially reduce consumers’ credit card interest rates, posed as the consumers’ credit card company representatives or affiliates and allegedly claimed they could save consumers thousands of dollars in credit card interest and enable them to pay off their debt faster. According to the FTC, the operators left people even deeper in debt after they paid upfront fees of between $995 and $4995, as well as substantial fees to transfer their existing debts to new cards.
Continue Reading FTC Bans Operators of Alleged Debt Relief Scam, $5.3M penalty