CFPB Enforcement Action Targets Debt-Settlement Payment Processor For Aiding Collection Of Upfront Fees

Debt Settlement

On August 25, the CFPB announced a consent order with an Oklahoma-based debt-settlement payment processor for allegedly helping other companies collect unlawful upfront fees from consumers. The CFPB specifically alleged that the company violated the Telemarketing Sales Rule by making it possible for debt-settlement companies to charge consumers advance fees before settling any of their debts. The CFPB believes the company processed tens of millions of dollars in illegal advance fees from tens of thousands of customers on behalf of hundreds of debt relief companies across the country. The consent order requires the company to pay $6,099,000 in consumer relief and a civil money penalty of $1 million. In addition, the company is subject to monitoring by the CFPB and a third-party monitor, and must submit compliance reports.