Global Client Solutions, a debt-settlement payment processor, will pay more than $6 million in relief to consumers and a $1 million civil penalty under the Consumer Financial Protection Bureau's proposed enforcement action announced Monday.

The CFPB has asked a federal district court to approve a consent order against the Oklahoma-based company.

Global Client Solutions allegedly helped other companies collect tens of millions of dollars in illegal upfront fees from consumers since October 2010, according to the CFPB's complaint. The company generally offers to help consumers reduce or eliminate credit card or other debts by negotiating settlements with creditors. It allegedly processed unlawful fees on behalf of hundreds of debt relief firms across the U.S.

The CFPB alleges that Global Client and its two principals, Robert Merrick and Michael Hendrix, violated the Telemarketing Sales Rule by making it possible for debt-settlement companies to charge consumers illegal upfront fees. The rule prohibits debt-settlement companies from doing so before settling any debts. The rule is meant to protect consumers from the risk of spending money on services that may not materialize and may ultimately leave them with additional debt.

In many cases, when consumers enrolled in a debt-settlement program, Global Client Solutions would tell them to stop paying their debts and instead make monthly payments to a payment processor account while the debts are negotiated.

The proposed enforcement bans Global Client Solutions from enabling other companies to collect illegal fees from consumers. Along with the $7 million payment in relief and penalties, the defendants would be subject to monitoring by the CFPB.

The action is part of the CFPB’s larger effort to address unlawful practices in the debt-settlement industry. It has taken action against five debt-relief companies for charging illegal advanced fees, as well as five mortgage-relief operations for charging illegal advance fees from distressed homeowners.

Last October, the CFPB obtained a judgment against payment processor Meracord, also among the largest in the industry, for helping collect illegal fees. Washington state-based Meracord and its CEO, Linda Remsberg, agreed to pay a $1.376 million penalty and were barred from processing payments for debt-settlement firms.

The CFPB said Meracord had processed thousands of illegal upfront fees since 2010, resulting in millions of dollars in charges to about 11,000 consumers. It reported nearly 5,000 of those people had none of their debts settled.

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