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From Banking and Finance Law Daily, December 4, 2014

Debt settlement firm to pay $69K for upfront fee violations

By John M. Pachkowski, J.D.

The Consumer Financial Protection Bureau has asked a federal district court to enter a consent order requiring Premier Consulting Group LLC and Law Office of Michael Lupolover to pay a fine for charging consumers illegal upfront fees for debt-settlement services they never received, and take other steps to prevent future legal violations.

The consent order would end litigation that the bureau and the United States Attorney for the Southern District of New York initiated in May 2013.

In that litigation, the CFPB filed a complaint in federal district court against Premier Consulting Group LLC and another debt-settlement service provider, Mission Settlement Agency, as well as several related entities. The bureau’s complaint alleged that the parties violated the Federal Trade Commission’s Telemarketing Sales Rule, which the CFPB has the authority to enforce, and routinely charged consumers upfront fees before settling consumers’ debts. The complaint further alleged that the illegal fees and the companies’ failure to provide effective services often caused consumers to fall further into debt and harm their credit history in the process (see Banking and Finance Law Daily, May 8, 2013).

The United States Attorney’s 2013 indictment alleged that defendants allegedly tricked people into paying Mission for debt-settlement services by lying to prospective customers about its fees, its purported affiliation with the federal government and one of the three leading credit bureaus in the United States, and the results it supposedly achieved for its customers. In November 2014, the owner of Mission Settlement—Michael Levitis—was sentenced to nine years in prison after pleading guilty to conspiracy charges of mail and wire fraud.

Under the consent order’s terms, the parties are required to pay a civil penalty of $69,075, which represents the amount of advance fees the companies took from consumers who did not have any debt settled. In addition, Premier and the Lupolover Firm will be prohibited from any future violations of the Telemarketing Sales Rule and must submit a compliance plan.

Commenting on the consent order, CFPB Director Richard Cordray said, “These companies took advantage of consumers in financial distress, charging tens of thousands of dollars for services they failed to deliver. Charging upfront fees for debt-settlement services is against the law, and today’s action is another reminder that these illegal practices will not be tolerated.”

Companies: Law Office of Michael Lupolover; Mission Settlement Agency; Premier Consulting Group LLC

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