Consumer Financial Protection Bureau Taking Actions against Credit Repair Companies
The companies allegedly charged illegal fees and misled consumers
The Consumer Financial Protection Bureau (CFPB) has filed two complaints and proposed final judgments against four credit repair companies and three individuals for allegedly charging illegal fees and misleading consumers.
The agency claims that the companies charged consumers illegal advance fees for credit repair services and misrepresented how well they could fix customers' credit scores.
Terms of the judgments
The terms of one of the judgments would require Prime Credit, IMC Capital, Commercial Credit Consultants, Blake Johnson, and Eric Schlegel to pay a civil money penalty of more than $1.5 million. The terms of the other judgment would require Park View Law—formerly known as Prime Law Experts—and its owner Arthur Barens to pay the U.S. Treasury $500,000 in relinquished funds.
"Today, the Bureau is taking action against companies that charged illegal fees and misled consumers about their ability to fix their credit," said Richard Cordray, director of the CFPB. "We will remain vigilant about protecting consumers from companies that mislead them to turn a dishonest profit."
Misleading and unsubstantiated claims
According to the CFPB, the defendants made misleading and unsubstantiated claims that they were able to take nearly any negative information off of consumers' credit reports and to improve their credit scores significantly. The companies took in thousands of people via sales calls and websites. Sometimes they would target people who had recently tried to get a mortgage, loan, refinancing, or another credit extension.
The CFPB alleges that these practices broke both the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Telemarketing Sales Rule.
What happens now?
If the federal court rules in favor of the agency, not only would the defendants have to pay the civil judgments, they would be prohibited from doing business in the credit repair industry for five years as well as permanently prohibited from violating the Telemarketing Sales Rule and the Dodd-Frank Act.