CFPB Sues Debt Settlement Company and Owners for Abusive Telemarketing Practices | Ballard Spahr srl
[author: Susan Nikdel]
On November 20, 2020, the CFPB filed a lawsuit against a student loan debt relief company, FDATR, Inc., and its owners, Dean Tucci and Kenneth Wayne Halverson. FDATR was an Illinois corporation that involuntarily dissolved in September 2020. Through telemarketing and phone sales, FDATR has promised to provide consumers with debt relief and credit repair services for students.
the complaint, filed in federal district court in Illinois, alleges that FDATR and its owners violated the Telemarketing Selling Rule (TSR) by engaging in deceptive and abusive telemarketing acts or practices and violated Consumer Financial Protection 2010 (CFPA) by engaging in deceptive or practical acts. According to the complaint, the defendants requested and received payments from consumers for debt relief and credit repair services before they achieved the results promised by the company and before it was legally allowed to do so. under the TSR and falsely represented in violation of the TSR and CFPA that company departments would reduce or eliminate student loan payments and improve credit scores.
The complaint alleges that FDATR would charge customers an upfront fee between $ 1 and $ 99 to ensure there was a valid payment method on file, and then generally charge a minimum of $ 499 as a one-time payment in both to. three weeks after registration or $ 600 paid in installments over three to six months. It also alleges that while the company promised it could improve consumer credit scores or help remove credit status codes or negative ratings from credit reports, the company did no work to. achieve the promised results. The complaint further alleges that Tucci and Halverson are individually liable under the TSR and CFPA because they were aware of, directed and substantially contributed to these violations. The alleged misconduct allegedly took place between 2011 and 2019.
The lawsuit seeks injunctions against FDATR, Tucci and Halverson, as well as damages, redress to consumers, restitution of ill-gotten gains and the imposition of civil monetary penalties.