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CFPB proposes $1.5M+ penalty for credit repair companies' misdeeds
Four California-based credit repair companies and three individuals face complaints and proposed final judgments from the CFPB for misleading consumers and charging illegal fees for credit repair services.
Under a proposed final judgment, announced by the bureau on Tuesday, Prime Credit LLC, IMC Capital LLC, Commercial Credit Consultants, Blake Johnson, and Eric Schlegel would pay a civil money penalty totaling more than $1.5 million. Under a second proposed final judgment, Park View Law, known formerly as Prime Law Experts Inc., and its owner Arthur Barens would pay $500,000 in relinquished funds to the Treasury Department.
The CFPB alleges in its complaints that 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 bureau found that the company targeted thousands of customers through sales calls and their websites and sometimes targeted consumers who had recently sought a mortgage, loan, refinancing or other extension of credit.
The CFPB alleges that the practices of these companies violated the Dodd-Frank Act and the Federal Trade Commission's Telemarketing Sales Rule.
In addition to paying the amounts noted in the proposed final judgments, all defendants would be prohibited from doing business within the credit repair industry for five years.
The judgments have been filed with the U.S. District Court for the Central District of California and are only effective if approved by the presiding judge.
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