A California district court approved a settlement between Prime Marketing Holdings LLC and the Consumer Financial Protection Bureau, whereby Prime Marketing agreed to pay $150,000 and be banned from offering credit repair services. The settlement was a result of the CFPB’s September 2016 suit against Prime Marketing for allegedly misleading consumers and charging illegal fees.
The proposed stipulated final judgment between the parties states that “[b]etween October 1, 2014 and at least June 30, 2017, [Prime Marketing] has charged over 50,000 consumers over $20 million for credit repair services, and returned approximately $1.5 million of these fees to consumers through either refunds or chargebacks.”
Under federal law, telemarketers and certain companies are prohibited from requesting or collecting fees for credit repair services until certain conditions are met regarding the delivery of services. In its suit, the CFPB alleged that Prime Marketing’s practices violated federal law when it charged customers for fees before it could prove its services had been provided. Apparently, the charges included initial setup fees the company said were to get special credit reports – fees that could be hundreds of dollars and recurring monthly fees of approximately $90.
In addition to the fees, the CFPB alleged Prime Marketing misrepresented its ability to remove negative information from consumer credit reports and that its services would result in a “substantial increase to consumers’ credit scores generally by an average of 100 points.”
The case is Consumer Financial Protection Bureau v. Prime Marketing Holdings LLC, Case No. 2:16-cv-07111, in the United States District Court for the Central District of California. A copy of the proposed final order is available here.