The CFPB charged a credit-repair software and solutions company and its CEO with assisting credit-repair businesses in their collection of advance fees from consumers, in violation of the Telemarketing Sales Rule ("TSR").
In a Complaint filed in the U.S. District Court for the Central District of California, the CFPB alleged that the company and its CEO encouraged credit report companies to (i) telemarket their services and (ii) charge advance fees. Specifically, the company provided telemarketing scripts and marketing materials, training on credit repair, advice on fee collection, and software that facilitated the collection of advance fees. The CFPB further alleged that the company and its CEO, by reviewing clients' revenue through the back-end of the software, knew or consciously avoided knowing that clients charged consumers fees before delivering a consumer report that demonstrated the promised results.
As a result, the CFPB charged the company and its CEO with violations of the TSR, 16 CFR 310.3(b) ("Assisting and facilitating deceptive telemarketing acts or practices"), and Section 1036(a)(1)(A) of the Consumer Financial Protection Act.
The CFPB is seeking relief in the form of (i) permanent injunctions, (ii) restitution, (iii) disgorgement, (iv) damages and (v) civil money penalties.
Primary Sources
- CFPB Press Release: CFPB Sues Software Company That Helps Credit-Repair Businesses Charge Illegal Fees
- CFPB Complaint: Daniel A. Rosen, Inc., d/b/a Credit Repair Cloud, and Daniel Rosen
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