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Financial Services Law Insights and Observations

CFPB moves to enforce subpoena against telemarketer in alleged credit repair operation

Courts CFPB Credit Repair Telemarketing Enforcement


On August 25, the CFPB filed a motion in the U.S. District Court for the District of Northern Florida to compel a telemarketing company (defendant) allegedly associated with a credit repair operation to comply with a subpoena and produce documents requested by the Bureau. According to the Bureau, the defendant has refused to comply with a subpoena in the ongoing litigation of a 2019 CFPB action against the credit repair operation (covered by InfoBytes here). The operation allegedly violated the Telemarketing Sales Rule and the Consumer Financial Protection Act by using “Hotswap Partners,” such as the defendant, who allegedly engaged in deceptive acts and practices when selling and marketing financial products and “live-transferr[ing]” consumers to the credit repair operation’s telemarketing call centers. The Bureau contends that the defendant transferred “thousands of consumers” to the operation each year for at least a decade, yet has only provided a minimal number of documents in response to the subpoena, which seeks records related to the defendant’s business activities and marketing relationship with the credit repair operation. According to the Bureau, the defendant has refused to produce additional materials based on “boilerplate and unsubstantiated objections.” The Bureau also argues that the defendant has failed to provide a basis for its objections, which include a “general privilege objection and a general objection that the requested format of certain unspecified documents would ‘impose an unreasonable burden on the Company,’” and has “rebuffed” every attempt made by the Bureau to discuss compliance with the subpoena.