RSSThe Consumer Financial Protection Bureau has filed a complaint against online debt-settlement company SettleIt, Inc., over alleged abusive acts or practices in violation of the Consumer Financial Protection Act of 2010 and violated the Telemarketing Sales Rule.
The company failed to disclose its relationship to certain creditors and steered consumers into high-cost loans offered by affiliated lenders, according to the complaint. SettleIt claimed to be an independent company in negotiating settlements with creditors CashCall and LoanMe, the bureau said. The company is affiliated with CashCall and LoanMe, however, sharing ownership with CashCall while LoanMe is “tied to SettleIt through loans and agreements.”
The CFPB alleges that SettleIt abused consumers’ trust by charging fees to negotiate settlements that favor those companies. The CFPB also alleges that SettleIt steered distressed consumers into taking out expensive loans with CashCall and LoanMe, while hiding the fact that SettleIt took its debt-settlement fees from these loan proceeds.
SettleIt concealed its relationships with CashCall and LoanMe, including language in call scripts that it was “not owned or operated by any of your creditors,” according to the complaint.
A proposed settlement for the complaint would require SettleIt to return at least $646,000 in fees to consumers, pay a $750,000 civil penalty, and stop settling debts for creditors with which it shares an ownership interest.
“SettleIt’s strategy of steering consumers into sweetheart deals with its confederates was illegal,” said CFPB Director David Uejio. “The CFPB will not tolerate companies that purport to represent consumers, but instead abuse their trust in a self-dealing scheme. This case provides a clear example of what Congress intended to prohibit when it created the CFPB and gave it authority to prevent abusive practices.”
