Consumer bureau sues Monster Loans, student loan debt-relief operators over fair credit reporting violations, illegal fees

Several firms and individuals involved in offering student loan debt-relief services were sued Thursday by the Consumer Financial Protection Bureau (CFPB), which claims the parties illegally obtained consumer reports, charged at least $15 million in unlawful advance fees, and engaged in deceptive conduct, the bureau said in an announcement.

The suit was filed in the U.S. District Court for the Central District of California against a mortgage lender called Chou Team Realty, LLC, which does business as Monster Loans (licensed in at least 30 states, including California, and operating since 2014 as a mortgage lender); an allegedly sham mortgage brokerage called Lend Tech Loans, Inc.; and several student loan debt-relief companies and individuals, the bureau said.

The CFPB, in is suit, alleges that:

  • between 2015 and 2017, Monster Loans violated the Fair Credit Reporting Act (FCRA) by obtaining consumer-report information (prescreened lists) from the credit bureau Experian for more than 7 million consumers with student loan debt on the pretense that the company planned to use the information to offer mortgage loans to consumers when, in fact, Monster Loans provided the reports to the student loan debt-relief companies to use in marketing their services;
  • between 2017 and at least early 2019, Lend Tech Loans, a sham company that has only ever been used to obtain prescreened lists from Experian, under a similar false pretense purchased prescreened lists with information from more than 1.5 million consumers for use in marketing student loan debt-relief services; and
  • while offering and providing student loan debt-relief services, certain defendants violated the Consumer Financial Protection Act of 2010 (CFPA) and the federal Telemarketing Sales Rule (TSR) by misrepresenting to consumers that they would have their interest rates reduced, have their credit scores improved, and that the U.S. Department of Education would become their servicer; and
  • certain defendants unlawfully charged and collected at least $15 million in fees before consumers received any adjustment to their student loans and made any payments toward their adjusted loans.

In addition to Monster Loans and Lend Tech Loans, the suit targets Docu Prep Center, Inc., which does business as DocuPrep Center and Certified Document Center; Certified Doc Prep Services, LP; Assure Direct Services, Inc.; Direct Document Solutions, Inc.; Secure Preparation Services, Inc.; and Docs Done Right, Inc. The suit also names Bilal Abdelfattah, who is also known as Belal Abdelfattah and Bill Abdel; Thomas “Tom” Chou; Sean Cowell; Robert Hoose; Eduardo “Ed” Martinez; Jawad Nesheiwat; Frank Anthony Sebreros; and David Sklar.

The bureau, in its complaint, asks that the court:

  1. permanently enjoin defendants from committing future violations of the FCRA, TSR, and CFPA and enter such other injunctive relief as appropriate;
  2. permanently enjoin defendants from advertising, marketing, promoting, offering for sale, selling, or providing any form of assistance to any debt-relief service;
  3. grant additional injunctive relief as the court may deem to be just and proper;
  4. order Monster Loans, the student loan debt relief companies, Docs Done Right, Nesheiwat, Sklar, Hoose, Sebreros, and Martinez to pay redress to consumers harmed by their unlawful conduct;
  5. award damages and other monetary relief against defendants;
  6. impose civil money penalties against defendants;
  7. order disgorgement of ill-gotten funds against relief defendants;
  8. order the rescission or reformation of contracts where necessary to redress injury to consumers; and
  9. award the CFPB the costs of bringing this action, as well as such other and additional relief as the court may determine to be just and proper.

Bureau complaint

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