CFPB Reaches $5.4 Million Settlement with Debt-Settlement Company for Charging Consumers Unlawful Fees

On May 17, 2021, the Consumer Financial Protection Bureau (CFPB) requested that a federal district court enter a final judgment and order against a debt settlement company for allegedly violating the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act (CFPA) in connection with its debt-settlement and debt-relief services. The company has agreed to the proposed settlement order, which will require it to pay consumers $5.4 million in restitution for charging unlawful fees and failing to provide required disclosures to its customers, on top of a civil penalty. 

This settlement is subsequent to the CFPB filing suit against the company in December 2020, alleging that the company had charged unlawful upfront frees before it performed its promised services and failed to disclose to consumers before enrollment when it would make a settlement offer to creditors or debt collectors among other violations.

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