On December 4, 2024, the CFPB announced that it entered into a proposed stipulated judgment with a student loan servicer and its owner, resolving allegations that the student loan servicer violated the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act (CFPA).
According to the judgment, the servicer at issue and its owner illegally requested and collected advance fees in the amount of $3.5 million. The CFPB also alleged that this violation of the TSR constitutes a violation of the CFPA because the CFPA prohibits any act or omission in violation of a federal consumer financial law.
The proposed stipulated judgment includes both conduct provisions and a civil money penalty. Specifically, it includes a permanent ban from advertising, marketing, or offering any consumer financial product or service, an injunction on collecting payments from consumers, a prohibition on any future joint ventures by the defendants, a prohibition on the use of consumer information that the defendants obtained in connection with their debt-relief services, and a discounted civil money penalty of $2,000 to be paid to the CFPB. This penalty takes into account defendants’ inability to pay and premised on the truthfulness, accuracy, and completeness of the financial statements defendants submitted. According to the judgment, an additional $998,000 will be imposed if the Court learns that defendants failed to disclose any material assets.
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