Credit Repair Company Prime Marketing Holdings Sued by Consumer Financial Protection Bureau
The company allegedly misled consumers and charged them illegal fees
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against credit repair company Prime Marketing Holdings, LLC, in federal district court.
The company is charged with allegedly misleading consumers regarding the cost and efficacy of its services as well as charging them numerous illegal advance fees. The CFPB hopes to stop the company's harmful behavior and to obtain relief for consumers affected by it, including refunds of fees they paid the defendant.
"Today we are taking action against Prime Marketing Holdings for luring consumers with misleading claims about its ability to repair credit files and then charging illegal fees," said CFPB Director Richard Cordray. "We are also alerting consumers to watch out for problematic credit repair practices. All consumers have a right to a free annual credit report and to dispute inaccurate information. This is a key step to building and maintaining good credit."
The company, which is incorporated in Delaware but has an office located in California, has operated under several names: Park View Credit, National Credit Advisors, and Credit Experts. It has marketed, offered, and provided consumers across the U.S. with services to repair their credit since 2014.
There are such services that claim to improve their customers' credit scores by challenging items on their credit reports, even when those items are correct. The CFPB alleges that Prime Marketing Holdings lured its customers with misleading and unsubstantiated claims of being able to remove almost all negative information from their credit reports as well as to significantly improve their credit scores. It brought customers in via its website as well as sales calls, sometimes targeting those consumers who had recently tried to get a mortgage, loan, refinancing, or other credit extension. Then it would charge those customers a number of varying illegal advance fees for its services.
The complaint claims that the company violated the ban on deceptive acts and practices in marketing and promoting services instituted in the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. It also claims that its charges of illegal advance fees and deceptive statements violated the Telemarketing Sales Rule.
The complaint accuses Prime Marketing Holding of the following in particular:
- Charging numerous fees for its services before it had shown that it had achieved the promised results, as required by law. At times the company charged fees that it claimed were necessary for obtaining special credit reports for consumers, and it also charged set-up fees amounting to hundreds of dollars as well as monthly fees often amounting to $89.99 per month.
- Misleading consumers regarding service costs. The company sometimes did not disclose that consumers would be charged a monthly fee during sales calls. At other times, it made consumers believe that they would be charged a monthly fee only if they chose to continue receiving the company's services after 60 days. These consumers were automatically charged the monthly fee.
- Not disclosing limits on its "money-back guarantee." The company made customers believe that they could receive a money-back guarantee for certain services, but it did not inform them of the significant limits of that guarantee. One such limit was that the consumer was required to pay for at least six months of the service in order to be eligible to receive the guarantee.
- Misleading consumers regarding the benefits of their services. The company led customers to believe that its services for repairing their credit would, or were likely to, remove negative items on their credit reports. It also led them to believe that those services would, or were likely to, lead to a significant increase of their credit scores. However, the company had no reasonable basis on which to base those claims.
Consumers experiencing problems with their credit repair company can submit a complaint to the CFPB online or by calling (855) 411-2372.