Consumer Financial Protection Bureau (CFPB) is the agency responsible for policing the actions of those in the credit industry. An investigation by the CFPB may be into the actions of a creditor who has not fulfilled their obligations to report a debt correctly to the consumer reporting agencies. Just as like a scenario would be when the CFPB investigates the actions, inactions, or practices of a credit repair organization.
Such is the case with California based Prime Marketing Holdings, which the CFPB had already been watching closely. Prime Marketing Holdings came to the attention of the CFPB as a direct result of the sanctioned actions of several businesses with which they are associated.
The allegations against the company included:
- Charging illegal advance fees
- This included hundreds of dollars in “Set-up fees”
- Misleading consumers regarding benefits of credit repair services they offered
- Misrepresentations including:
- How much negative information could legitimately be removed from the credit report
- How much of an increase in their score could be reasonably expected – often claiming 100 points or more with no way to substantiate the claim.
- Misrepresentations including:
- Misrepresentation of the cost of the services they offered
- Including not informing potential clients that there was a monthly fee involved for the services
- Failure to disclose terms and conditions of “money back guarantee”
- Omitting from the discussion of the “money back guarantee” that a client would have to pay for services for at least six months before being eligible to claim against the guarantee.
- Other false or misleading claims
- At times claiming they were a “mortgage affiliate”
- At times representing that they could help a client obtain a mortgage
Dating from October 1, 2014 and continuing through at the least June 30, 2017, the company billed more than $20 million dollars for credit repair. This money was billed to approximately 50,000 clients of their credit repair services.
The CFPB has a proposed settlement – if approved by the U.S. District Court for the Central District of California – that seeks to ban Prime Marketing Holdings permanently from transacting further business in the consumer credit repair industry.
Additionally, the settlement requires Prime Marketing Holding to pay $150,000 in civil penalties.
Prime Marketing Holdings operated under several aliases, Park View Credit, National Credit Advisors, and Credit Experts to name a few.
CFPB is responsible for protecting consumers against the unscrupulous acts of the financial industry. Credit repair agencies are not immune to their policing as many credit repair agencies look for loopholes or simply disregard the law. Credit reporting agencies are not immune to the CFPB’s investigations either, although it is more common that their interaction is about an individual line item on a consumer’s credit report.
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