CFPB closes California credit repair company for lying to consumers
Top Marketing Headlinesa Californian credit repair company, was already on the radar of the Consumer Financial Protection Bureauas several of its associated companies were fined earlier this year by the bureau for misleading consumers and charging illegal fees for credit repair services.
Last June, the CFPB announced that Credit premium, IMC Capital, Trade Credit Advisors and Park View Actformerly known as Top notch legal expertsand several executives in charge of the various companies will pay more than $2 million for the alleged illegal actions.
Many of these companies have partnered with Top Marketing Headlineswhich operated under several names, including: Park View Credit, National Credit Counselors and Credit experts.
Now the CFPB is doling out its punishment against Prime Marketing and banning the company from the credit repair business.
The CFPB announced on Wednesday that it has filed a motion for final judgment that would resolve its prior actions against Prime Marketing Holdings. The bureau filed a lawsuit against Prime Marketing, claiming the company was charging illegal upfront fees and misleading consumers about the cost and effectiveness of its services and the nature of its money-back guarantee.
The final judgment would permanently bar Prime Marketing from doing business in the credit repair industry and require the company to pay a civil penalty of $150,000.
According to the CFPB, between October 1, 2014 and at least June 30, 2017, the company billed more than 50,000 consumers more than $20 million for credit repair services.
But in the bureau’s lawsuit, which was filed in September 2016, the CFPB accused Prime Marketing of making “misleading and unsubstantiated claims about its ability to improve consumers’ credit scores by removing negative information from their credit reports”.
The company also “misrepresented and failed to disclose the limits of its money-back guarantee,” the CFPB said.
According to the CFPB complaint, Prime Marketing’s customers included people who were looking to get a mortgage, loan, refinance or other credit extension.
The CFPB claimed that at times, Prime Marketing said in calls to consumers that it was a “mortgage affiliate” or that it could help consumers get a mortgage.
The CFPB said Prime Marketing allegedly made a number of false promises to its customers, including (taken directly from the CFPB):
- Billing of illegal advances: Prime Marketing Holdings charged various fees for its services before demonstrating that the promised results had been achieved, as required by law. Specifically, the company charged consumers an upfront fee it said was sometimes necessary to obtain special consumer credit reports. The company also charged setup fees totaling hundreds of dollars and monthly fees that often amounted to $89.99 per month.
- Mislead consumers about the benefits of its credit repair services: Prime Marketing Holdings misrepresented its ability to delete negative entries on consumer credit reports. The company has also made false claims to customers that its credit repair services will, or are likely to result in, substantial increases in consumer credit scores, typically by an average of 100 points. The company had no reasonable basis to make these claims.
- Distort the costs of its services: In some cases, Prime Marketing Holdings failed to disclose to consumers during sales calls that they would be charged a monthly fee.
- Not disclosing the limitations of the “money back guarantee”: Prime Marketing Holdings incorrectly stated that it offered a money-back guarantee if consumers were not satisfied with the results of the company’s services. The company also failed to clearly and prominently disclose that the warranty had significant limitations, including that the consumer had to pay for at least six months of services to be eligible for the warranty.
To be effective, the proposed final judgment must be approved by the United States District Court for the Central District of California.
“Today we are taking action to shut down a business that deceived consumers into paying for credit repair services that failed to deliver on the company’s promises,” said CFPB Director Richard Cordray. “We remain committed to taking action against companies that mislead consumers by charging illegal fees with false promises.”