The Consumer Financial Protection Bureau has filed a case against Libre, an immigrant services company, over what the agency called a “predatory immigrant-services scam.” Libre, its parent company Nexus Services Inc., and owners Micheal Donovan, Richard Moore and Evan Ajin are all named in the suit.
The Georgia-based Libre targeted primarily Hispanic immigrants in federal detention centers who spoke little or no English, the CFPB said. The company used false and misleading statements to pressure these immigrants to sign English-only contracts locking them into years of “exorbitant” monthly payments. Libre pays detainees’ bonds up front, charging them a large percentage of that amount as well as a non-refundable monthly fee to lease GPS monitoring technology until their case is resolved. The company threatens those unable to pay or their family members, sometimes with deportation or imprisonment, according to the bureau’s complaint
The CFPB alleges that immigrants and their co-signers sign the financial contracts without understanding the terms or what they are paying for, a violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition of deceptive and abusive acts and practices.
This case, the first announced under CFPB Acting Director Dave Uejio, will “send a strong signal that financial scams targeting communities of color will not be tolerated,” the bureau said. Uejio said in a January blog post he would prioritize racial discrimination supervision issues, especially fair lending violations, and other factors that affect “communities of color and other vulnerable populations.”
“Libre presented itself as a lifeline to help people stuck in limbo at immigration facilities. But we believe it was a wolf in sheep’s clothing,” Uejio said. “This case is a prime example of how people of color are targeted in financial scams and the latent inequity that is too often found in the market for financial products and services. The bureau won’t stand for it. Stopping these kinds of cash-grab schemes is part of the bureau’s commitment to addressing racial injustice in the market.”
The CFPB was joined by the attorneys general for Massachusetts, New York and Virginia.