Debt settlement, relief firm sued for abusive acts, practices

A Beverly, Mass., debt-settlement and relief firm has violated telemarketing regulations by engaging in abusive and deceptive acts, the federal consumer financial protection agency charged in a lawsuit filed Monday.

According to the Consumer Financial Protection Bureau (CFPB), DMB Financial, LLC, violated both the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act of 2010 (CFPA) in connection with the firm’s debt-settlement and debt-relief services. The bureau alleges that abusive and deceptive acts or practices in violation of the TSR included requesting and receiving fees before the firm performed promised services and before consumers started payments under any debt settlement.

The Bureau said it also alleges that, after settling individual debts, DMB collected fees based on increased debt amounts after enrollment rather than the amount of each debt at the time of enrollment.

Further, the agency said it alleges that DMB failed to disclose to consumers before enrollment when it would make a settlement offer to creditors or debt collectors. The bureau also alleges that DMB did not disclose the amount of money or the percentage of each outstanding debt the consumer had to accumulate before DMB would make a settlement offer.

DMB’s alleged TSR violations also constitute violations of the CFPA, the bureau alleged. DMB misrepresented to consumers that it would not charge fees for its services until after it settled a debt and consumers made a payment under the settlement, the agency claimed.

Finally, CFPB asserts that DMB misrepresented in its contracts the debt amount that it would use to determine its fees.

The agency is seeking an injunction, as well as redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties in its lawsuit.

Consumer Financial Protection Bureau Sues DMB Financial, LLC for Allegedly Violating the Telemarketing Sales Rule and Consumer Financial Protection Act