[author: Viona Harris]

On July 8, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it reached a settlement with a Florida-based student debt relief company and three of the company’s officers. The complaint, which was filed in the Southern District of Florida, alleges that from 2016 through October 2019, the company violated the Telemarketing Sales Rule (TSR), 16 C.F.R. 310, and the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5536, by charging consumers seeking student loan debt relief illegal advance fees. These fees allegedly ranged from $99 to $699 and were collected before any terms of those consumers’ debts were altered and before consumers had made at least one payment on the altered debts, in violation of the TSR. The complaint further alleges that the three officers provided substantial assistance to a company they knew was engaged in deceptive or abusive conduct under the TSR by hiring, training, and supervising the sales team and handling the company’s finances and marketing. Lastly, the complaint alleges that the company’s TSR violations also constituted CFPA violations because the company had provided consumer financial products or services that were not in conformity with federal consumer financial law.

The proposed settlement requires that defendants pay restitution in the amount of $3,784,360 million to provide redress to all affected consumers. However, due to the defendants’ sworn financial statements indicating a limited ability to pay, full payment of this amount would be suspended if the three officers collectively paid $22,000 within ten days of the entered order. Additionally, each defendant would be required to pay $1 in civil money penalties and would be permanently enjoined from providing debt-relief services.