‘Credit repair’ scam threatened with shut-down and fined $150,000
Inside Subprime: August 31, 2017
By Caroline Thompson
The Consumer Financial Protection Bureau filed a judgement in federal court yesterday to resolve a lawsuit against Prime Market Holdings, LLC, a Delaware-based credit repair company with offices in California.
The lawsuit, originally filed in September 2016, accused Prime Market Holdings of illegal credit repair practices, like charging unlawful advance fees and misleading customers about both the effectiveness and the price of their services. The company also misinformed customers about its “money-back guarantee,” which had many strict limitations.
In addition to proposing that Prime Market Holdings be permanently banned from doing business in the credit repair industry, the CFPB is also ordering the company pay a $150,000 civil money penalty.
“Today we are taking action to shut down a company that deceived consumers into paying for credit repair services that did not live up to the company’s promises,” said CFPB Director Richard Cordray yesterday. “We remain committed to taking action against companies that mislead consumers into paying illegal fees with false promises.”
The CFPB judgement is only a proposal, so it still needs to be approved by a federal judge before it can be implemented. But historically, CFPB judgments of this nature have gone through. According to a CFPB press release:
“On June 27, 2017, the Bureau filed two related complaints against Commercial Credit Consultants, Prime Credit, IMC Capital, Blake Johnson, Eric Schlegel, Park View Law and Arthur Barens. Park View Law and Arthur Barens partnered with Prime Marketing Holdings from September 2014 to June 2015. Those two complaints alleged unlawful conduct very similar to the conduct alleged here. On the same day, the Bureau and those defendants filed proposed settlements to resolve those suits. Those settlements have both been approved.”
Between October 1, 2014 and June 30, 2017, Prime Market Holdings charged more then 50,000 customers in excess of $20 million for their credit repair services.
To learn how to repair your credit without paying a shady company to do it for you, check out our blog post on when to try credit counseling, and take a tour through our recent eBook that lays out the basics of all things credit.