The CFPB filed a complaint on Tuesday against two-debt relief firms that allegedly charged consumers prohibited advance fees for debt-settlement services, and the watchdog is seeking to obtain recompense for victims and halt the firms’ operations.
“Today’s action takes aim at two operations we believe are designed to profit through unscrupulous and illegal business practices,” CFPB Director Richard Cordray said. “Consumers deserve better and we are proud of this coordinated effort with the Department of Justice and U.S. Attorney Preet Bharara to crack down on harmful behavior.”
Mission Settlement Agency and Premier Consultant Group allegedly consistently charged consumers illegal upfront fees before providing the promised debt-settlement services, which caused many consumers to fall further into debt.
The CFPB alleges that the defendants violated the FTC’s Telemarketing Sales Rule and that Mission engaged in deceptive and unfair practices that violated the 2010 Dodd-Frank Act. The defendants allegedly charged more than $1.3 million in fees to more than 1,000 consumers across a number of states.
Last July, the CFPB initiated its investigation and later referred evidence of criminal behavior to the U.S. Attorney for the Southern District of New York. Under Dodd-Frank, the CFPB is required to refer evidence of criminal activity to the Department of Justice.