Breaking News

Tweet TWEET

Florida Debt-Relief Firm Penalized in First CFPB-State Sanction

A Florida debt-relief company will pay as much as $100,000 in refunds to customers under the first joint enforcement action between the Consumer Financial Protection Bureau and its state allies.

Payday Loan Debt Solution Inc. was found to have routinely charged consumers up-front fees for assistance in settling debts, the Consumer Bureau said in a statement outlining the order entered today by the U.S. District Court for the Southern District of Florida.

“Today’s order will put money back in the pockets of consumers who were wrongfully charged for debt-relief services,” Consumer Bureau Director Richard Cordray said in the agency’s statement.

The court found that the Doral, Florida-based company’s practices violated the federal Telemarketing Sales Rule and the Dodd-Frank Act of 2010, which created the Consumer Bureau, according to the agency’s statement. It also ran afoul of similar state laws, according to the bureau.

Consumers who paid fees but got no debt-settlement services will get payments from the $100,000. The company will also pay a $5,000 fine.

The bureau’s action, its first joint enforcement work with the states, was taken in coordination with the attorneys general of New Mexico, North Carolina, North Dakota and Wisconsin, and the Hawaii Office of Consumer Protection.

The company cooperated with the investigation and immediately ceased unlawful conduct, the CFPB said in its statement. An e-mail to Sanjeet Parvani, the company’s president, wasn’t returned.

To contact the reporter on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.