RSSThe Consumer Financial Protection Bureau filed a lawsuit against DMB Financial over alleged violations of the Telemarketing Sales Rule and the Consumer Financial Protection Act of 2010.
The Beverly, Mass.-based company offers to renegotiate, settle, or otherwise alter the terms of unsecured debts owed by consumers to creditors or debt collectors.
The bureau alleges that DMB engaged in abusive and deceptive acts or practices in violation of the TSR. These activities include requesting and receiving fees before it performed its promised services and before consumers started payments under any debt settlement. The CFPB also alleges that, after settling individual debts, DMB collected fees based on increased debt amounts after enrollment rather than the amount of each debt at the time of enrollment.
DMB also failed to disclose to consumers before enrollment when it would make a settlement offer to creditors or debt collectors, the agency said. The company did not disclose the amount of money or the percentage of each outstanding debt the consumer had to accumulate before DMB would make a settlement offer, according to the suit. These alleged TSR violations would also be CFPA violations.
Additionally, DMB misrepresented to consumers that it would not charge fees for its services until after it settled a debt and consumers made a payment under the settlement, the bureau said, and DMB misrepresented in its contracts the debt amount that it would use to determine its fees.
