RSSThe Consumer Financial Protection Bureau filed a lawsuit against Commonwealth Equity Group, LLC, which does business as Key Credit Repair, and its president and owner Nikitas Tsoukales, also known as Nikitas Tsoukalis.
In their telemarketing of credit-repair services, the defendants violated the Consumer Financial Protection Act’s prohibition against deceptive acts or practices and the Telemarketing Sales Rule’s prohibitions on deceptive and abusive telemarketing acts or practices, the bureau said. From 2016 through 2019 alone, KCR allegedly enrolled nearly 40,000 consumers nationwide, and since 2011, it collected at least $23 million in fees from consumers.
The complaint, filed in the federal district court for the District of Massachusetts, specifically alleges that the defendants deceptively misrepresent that KCR could substantially increase consumers’ credit scores and remove negative entries on consumers’ credit reports when, in fact, in numerous instances, KCR did not do so.
The complaint also alleges that KCR and Tsoukales engaged in abusive acts or practices in violation of the TSR by requesting and receiving payment for their credit-repair services before achieving the promised results and before giving consumers a consumer report more than six months after achieving the results to demonstrate the results.
Those misrepresentations are deceptive acts or practices in violation of the CFPA and the TSR, and the alleged violations of the TSR also constitute violations of the CFPA, the bureau said.
The bureau jointly investigated with the Commonwealth of Massachusetts, and the state’s Attorney General Maura Healey joined the CFPB suit. Since January 2011, KCR has enrolled roughly 12,616 Massachusetts consumers, the complaint said.
The complaint seeks redress to consumers, an injunction, and the imposition of civil money penalties.
