Two debt relief companies that allegedly claimed falsely that they are affiliated with the federal government were sued Thursday by the Consumer Financial Protection Bureau (CFPB).
The bureau also alleged that the companies falsely promised to eliminate consumers’ debts and improve their credit scores in exchange for “thousands of dollars in advance fees,” the agency stated in a release.
The lawsuit was filed against two Baltimore-based companies operating under the name “FDAA,” a service provider, and their owners, CFPB stated. The agency stated that FDAA claimed to provide advice and assistance to consumers for eliminating all or a portion of their debts to improve their credit scores. Clear Solutions, Inc., also headquartered in Baltimore, processed consumer payments for the FDAA companies and provided other services, CFPB said.
“FDAA and its owners lied to financially vulnerable consumers to line their pockets with cash,” said CFPB Director Richard Cordray. “Today’s lawsuit seeks to stop these deceptive practices, impose civil money penalties, and return to cheated consumers the fees they paid to these companies.”
CFPB said that its complaint seeks monetary relief, injunctive relief, and civil money penalties; it did not specify amounts.