WASHINGTON — The Consumer Financial Protection Bureau said Wednesday it had successfully forced a credit repair company to exit the industry.
The CFPB filed a lawsuit last year against Prime Marketing Holdings, which operated under names including Park View Credit, National Credit Advisors and Credit Experts. The company marketed credit repair services, but the CFPB accused it of misleading consumers.
On Wednesday the CFPB and Prime Marketing Holdings agreed to a proposed final judgment that would permanently ban the company from the credit repair industry and require that it pay a $150,000 civil money penalty. Because it is a federal case, a judge still needs to agree to the judgment, but experts said the agreement is a win for the bureau.
“The defendant agreed to exit the industry entirely, which the CFPB no doubt views as a significant victory,” said Daniel Delnero, an associate at Ballard Spahr who specializes in consumer financial services litigation.
In a press release, the CFPB said Prime Marketing Services charged fees before demonstrating that it had actually provided the service it claimed to have done and misled consumers on the benefits of its service, monthly fees and a “money-back guarantee.”
“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,” CFPB Director Richard Cordray said in the press release. “We remain committed to taking action against companies that mislead consumers into paying illegal fees with false promises.”
While financial institutions often find themselves at odds with the CFPB, many banks and credit unions are supportive of its efforts against credit repair service companies.
“Several members of the financial services industry support any crackdown on credit repair services, as they have a reputation for generating trumped-up credit disputes,” Delnero said.
The proposed final judgment was filed with the U.S. District Court for the Central District of California.