District Court orders debt-relief company to pay $41.1 million CMP

Courts CFPB Enforcement Debt Relief Debt Settlement CFPA Telemarketing Sales Rule

On February 7, the U.S. District Court for the Northern District of Illinois entered a default judgment and order against a debt-relief company (default defendant) accused of allegedly violating the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act. As previously covered by InfoBytes, the Bureau filed the complaint in 2020 alleging that the company and its two owners (collectively, “defendants”) misrepresented material aspects of their student loan debt-relief services, and violated the TSR by requesting and receiving payment of disproportionate fees for their services before they altered or resolved the terms of the debts. The judgment against the default defendant imposes both permanent injunctive relief and monetary remedies including a $41.1 million civil monetary penalty. The default defendant must also pay $2.1 million in consumer restitution and is permanently enjoined from participating in the financial-advisory, debt-relief, or credit-repair service markets in any way, including through marketing or ownership of such services.