The Consumer Financial Protection Bureau (CFPB) announced news on Tuesday (June 27) that it filed two complaints and proposed final judgments against four California-based credit repair companies and three individuals for misleading consumers and charging illegal fees.
In a press release, the government watchdog said the companies not only required advance fees, which is illegal, but also misrepresented their ability to repair consumers’ credit scores.
Under a proposed final judgment, Prime Credit, IMC Capital, Commercial Credit Consultants, Blake Johnson and Eric Schlegel will pay a civil money penalty of more than $1.5 million. Under a second proposed final judgment, Park View Law, known formerly as Prime Law Experts, and its owner Arthur Barens will pay $500,000 in relinquished funds to the U.S. Treasury.
“Today, the Bureau is taking action against companies that charged illegal fees and misled consumers about their ability to fix their credit,” said CFPB Director Richard Cordray in a press release announcing the judgements. “We will remain vigilant about protecting consumers from companies that mislead them to turn a dishonest profit.”
In complaints filed with the proposed final judgments, the CFPB alleges the defendants made misleading, unsubstantiated claims that they could remove virtually any negative information from consumers’ credit reports and could boost consumers’ credit scores by significant amounts. The companies attracted thousands of customers through sales calls and their websites, at times targeting consumers who had recently sought to obtain a mortgage, loan, refinancing or other extension of credit.
The CFPB alleges the companies charged these consumers millions of dollars in illegal advance fees for their credit repair services and that the practices violated the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Telemarketing Sales Rule.