On March 22, the United States District Court for the Central District of California issued final judgment and stipulated order against one of the defendants in an action brought by the CFPB, the attorneys general of Minnesota and Carolina North and the Los Angeles City Attorney, alleging a student debt relief operation deceived thousands of borrowers and charged more than $71 million in illegal advance fees. As previously covered by InfoBytes, the complaint alleged that the defendants violated the CFPA, the Telemarketing Sales Rule, and various state laws. The amended complaints (see here and here) also added new defendants and included claims to avoid fraudulent transfers under the Federal Debt Collection Procedures Act and California’s Uniform Voidable Transactions Act, among others. A stipulated final judgment and order was entered against the named defendant in July (covered by InfoBytes here), which demanded payment of more than $35 million in damages to affected consumers, a $1 civil penalty to the Bureau, and $5 $000 in civilian money. penalties to each of the three states. The court also issued final judgments against several of the defendants, as well as a default judgment and order against two other defendants and a settlement with two non-parties (covered by InfoBytes here, here, here, here and here).
The final judgment against the Settling Defendant, who neither admitted nor denied the allegations unless otherwise stated, permanently bars the Defendant from participating in telemark services or offering or selling debt relief services, and prohibits it from misrepresenting the benefits that consumers may receive from a product or service. Defendant is also permanently prevented from violating applicable state laws and may not disclose, use, or benefit from any customer information obtained in connection with the offering or provision of debt relief services. debt. The settlement orders the defendant to pay more than $2.8 million in consumer relief, as well as a civil penalty of $1 to the Bureau and $5,000 to each of the three states.