On August 8, the CFPB proposed a stipulated final judgment and order to the U.S. District Court for the Central District of California against a credit repair software company. If approved by the District Court, this order would settle the CFPB’s allegations that a software company and its CEO violated the Telemarketing Sales Rule (TSR), the CFPA and approve a fine $1 million for the company and $2 million for the CEO — as well as enjoin them from future actions. In a complaint previously covered by InfoBytes, the CFPB found the defendants provided credit repair tools and services to businesses who offered these credit repair services to consumers; the CFPB alleged the defendants provided substantial assistance to their customers and violated the TSR and charged advance fees for credit repair services. An advance fee includes any fees charged to a customer enrolled in a credit repair service, monthly fees, or fees charged following removal from a consumer’s credit report. Credit repair services remove derogatory information from a person’s credit history.

 

The Bureau now seeks to permanently restrain the defendants from assisting anyone knowingly using telemarketing for credit repair services and charging advance fees for those services. It also seeks to enjoin the defendants from violating the TSR related to offering credit repair services. Additionally, the CFPB asked the court for several screening updates to identify suspect companies preemptively, among other compliance duties. The Bureau and the defendants have agreed to this order, which now awaits approval by the District Court. The defendants neither admitted nor denied the allegations in the complaint.