On May 17, the Consumer Financial Protection Bureau (CFPB) announced a
settlement with DMB Financial LLC, a Massachusetts-based debt-settlement company.
In its complaint, the CFPB alleged that DMB Financial violated the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act of 2010 (CFPA) by charging illegal fees and misleading consumers about its business practices. Specifically, the CFPB alleged that DMB Financial:
Violated the TSR by requesting and receiving fees before it performed its promised debt-relief services and before consumers made any debt-settlement payments; by charging fees based on the increased debt amounts after enrollment rather than based on the amount of each debt at the time of enrollment; and by failing to properly disclose when, and under what conditions, it would make a bona fide settlement offer to each creditor or debt collector;
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The CFPB recently entered into a proposed settlement of its lawsuit filed in California federal district court against a debt settlement company alleging that the company engaged in abusive acts or practices in violation of the Consumer Financial Protection Act and also violated the Telemarketing Sales Rule. In its complaint, the CFPB alleges that the company failed to disclose its relationship to certain creditors and steered consumers into high-cost loans offered by these affiliated lenders. The complaint alleges that the company regularly prioritized the settlement of debts owed to certain creditors over debts owed to unaffiliated creditors.
The CFPB recently entered into a consent order with Nationwide Equities Corporation (Nationwide), which the CFPB refers to as a mortgage broker and mortgage lender that primarily.
First, on April 6
th the CFPB issued a consent order against Yorba Capital Management and the company’s former owner in his individual capacity for violating the Fair Debt Collection Practices Act (FDCPA). The CFPB states that the debt collection company mailed litigation notice letters to consumers, “threatening to file suit against a consumer if the consumer did not pay [the debt] amount indicated on the letter.” The letters also contained language that implied that legal action against consumers had already begun and listed several methods by which the company could collect on a judgement. The CFPB found that these practices violated the Consumer Financial Protection Act (CFPA) because the letters were deceptive because “the letters falsely represented that consumers would be sued and that there would be further legal action if the consumers did not pay the debt amount on the notices.”