CFPB and 3 states sue firm over predatory immigrant services, violation of Dodd-Frank

A firm alleged to have engaged in a predatory scam that traps immigrants held in detention by Immigration and Customs Enforcement (ICE) into paying expensive, long-term fees is being sued jointly by the Consumer Financial Protection Bureau (CFPB) and the attorneys general (AGs) of Virginia, Massachusetts, and New York, the bureau said Monday.

In a filing Monday, the bureau and state AGs said that Libre by Nexus, Inc., its parent company Nexus Services, and owners Micheal Donovan, Richard Moore, and Evan Ajin have engaged in unfair or deceptive practices in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) as well as state consumer protection laws.

The CFPB said that its investigation showed that Libre’s business model preys on detainees and their families desperate to get the detainees out of ICE detention centers where they have been held, sometimes for months, while awaiting resolution of their immigration cases. In exchange for securing a bond, Libre requires the immigrants to pay a huge upfront fee equal to 25% – 30% of the bond plus $420 per month to “lease” GPS-tracking ankle monitors until their case is resolved, usually years later. It said that unlike a fully-paid bond, these fees are never refunded.

The bureau said that in the end, the immigrants often end up paying far more in non-refundable Libre fees than they would have paid for their refundable ICE bond. For example, an immigrant with a $10,000 bond whose immigration case took three years to resolve could expect to pay more than $17,000 to Libre to cover its fees and the cost of “leasing” the GPS tracking ankle monitors.

Libre is accused of routinely deceiving non-English speakers to sign contracts and using illegal tactics to collect the steep fees. The suit says that immigrants and their co-signers sign the financial contracts not understanding the terms, often misled about what they are paying for.

Among the allegations in today’s complaint, the release stated, are that Libre:

  • Coerces vulnerable non-English speakers to sign predatory financial contracts in English: Libre presents immigrant detainees and co-signors with 20-page English contracts, often in the dead of night after hours of travel. The detainees are utterly dependent on Libre for an explanation of what is happening, how they can reunite with their families, and what their rights are.
  • Deceives consumers about its relationship with immigration authorities: Libre leads consumers to think it is affiliated with ICE. In fact, Libre is just a middleman to a bond agent, and it has no affiliation with authorities.
  • Strong-arms detainees with false debt collection threats: Libre falsely threatens immigrants that if they do not pay up, they will face dire consequences, sometimes including threats that they will be re-detained or deported. Libre systematically makes false threats to sue the detainees or their families, send the accounts to collection, and report failures to pay to credit bureaus. Libre also has falsely threatened to place GPS devices on co-signers to coerce payment.
  • Incentivizes its employees to deceive and threaten: Libre offers financial rewards to its representatives for signing up new customers and collecting payments. This incentivizes them to rush through the intake process, omit or misrepresent consumers’ obligations when they sign, and make false threats to consumers to collect payments.

The lawsuit seeks an injunction, damages or restitution to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.

Consumer Financial Protection Bureau and Virginia, Massachusetts, and New York Attorneys General Sue Libre for Predatory Immigrant-Services Scam