On January 9, the Consumer Financial Protection Bureau (CFPB) filed a complaint against a number of mortgage companies, student loan debt-relief companies and individuals for unlawful conduct providing debt-relief services to consumers with student loans.
The CFPB’s case, according to the complaint, is that between 2015 and 2017, a mortgage company, violated the Fair Credit Reporting Act (FCRA) by unlawfully obtained consumer reports from a consumer-reporting agency; the company then provided the reports to other companies that used the reports to market debt-relief services to consumers with student loans. The complaint adds that a “sham entity” associated with the mortgage company also unlawfully obtained consumer reports from the consumer-reporting agency and provided them to other companies, including those that used the lists to market student-loan debt-relief services.
The companies that received the reports from the mortgage company, the sham entity and others targeted consumers, selling them that they could obtain lower interest and improve their credit scores by consolidating their loans and that the United States Department of Education would become the “new servicer” on their loans. “All of this was false,” the complaint reads. As mentioned in the complaint, this act violates the Telemarketing Sales Rule (TSR). In addition, several of the companies unlawfully charged and collected fees before the consumers’ applications were approved.
The complaint is demanding, among others, that these companies and individuals be permanently enjoined from advertising, marketing, promoting, offering for sale, selling, or providing any form of assistance to any debt-relief service and to pay redress to consumers harmed by their unlawful conduct.
In total, 19 defendants were named, including both companies and individuals.