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CFPB Enforcement Actions

The Consumer Financial Protection Bureau (CFPB), a federal agency created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, regulates the offering and provision of consumer financial products or services under the federal consumer financial laws, and has the authority to bring enforcement actions against financial service providers. While the CFPB accepts tips from whistleblowers, and applicable laws offer whistleblowers protection from retaliation, there is currently no provision for CFPB whistleblowers to receive financial rewards. However, conduct that is regulated by the CFPB may also give rise to a claim under a different whistleblower reward program.

Below are summaries of recent CFPB settlements or successful enforcement actions. If you believe you have information about fraud which could give rise to a claim under a whistleblower reward program, please contact us to speak with one of our experienced whistleblower attorneys.

October 13, 2020

Nissan Motor Acceptance Corporation, an auto financing subsidiary of the car manufacturer, has agreed to pay a civil penalty of $4 million and provide up to $1 million in restitution to customers to settle charges that the company engaged in illegal collections and repossession practices.  The company was alleged to have repossessed cars despite the customer having made payments or taken other actions to avoid repossession; imposed improper storage fees; refused to return personal property to customers; overcharged customers making payments by telephone; and mislead customers regarding their right to bankruptcy relief.  CFPB

Tagged in: Financial and Investment Fraud, Financial Institution Fraud,

September 15, 2020

ITT Technical Institute settled claims with the CFPB and 48 states and the District of Columbia, agreeing to discharge outstanding student loans incurred for attendance at the for-profit college, run by holding company PEAKS.  PEAKS allegedly knew or was reckless in not knowing that many student borrowers did not understand the terms and conditions of those loans, could not afford them, or in some cases did not even know they had them. The settlement, valued at $330 million, also requires PEAKS to provide credit reporting agencies information to correct credit scores negatively affected by the illegal lending scheme, and to shut down after carrying out the settlement.  CFPB; Cal; FL; MI; PA; VA; WA

Tagged in: Education Fraud, Financial and Investment Fraud,

August 20, 2020

TD Bank, N.A. has been ordered to pay an estimated $97 million in restitution to about 1.42 million customers, as well as a civil monetary penalty of $25 million, for engaging in deceptive practices that violated the Consumer Financial Protection Act of 2010 and the Fair Credit Reporting Act.  In connection with its optional Debit Card Advance (DCA) service, TD Bank allegedly interfered with its customers’ ability to understand terms and conditions by misrepresenting DCA as “free” or a “feature” of their new checking accounts, when in reality it could result in fees of $35 per overdraft transaction.  Furthermore, in connection with consumer account information, TD Bank allegedly failed to implement policies that would ensure the accuracy of that information before it was provided to consumer reporting agencies.  CFPB

Tagged in: Financial Institution Fraud, Misrepresentations,

July 23, 2020

Certified Forensic Loan Auditors, LLC (CFLA) and its president and CEO, Andrew Lehman, have been ordered to pay a suspended judgment of $3 million in restitution and $40,000 in civil monetary penalty for making misleading statements about the content and efficacy of its services, the qualifications of its employees, and its ability to help customers avoid foreclosure, all while charging unlawful advance fees.  For violating Regulation O and the Consumer Financial Protection Act of 2010 (CFPA), CFLA and Lehman have been permanently banned from providing similar services in the future.  CFPB

July 8, 2020

Timemark, Inc. and owners Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway have been ordered to pay $3.8 million in restitution and civil penalties to resolve allegations of defrauding more than 7,300 student loan borrowers.  According to the CFPB, between 2016 and 2019, the Florida-based company convinced consumers to pay up to $699 in fees to file paperwork for loan consolidation, forgiveness, or repayment plans that the U.S. Department of Education already offered for free.  Timemark also did so using telemarketing campaigns, which violated the Telemarketing Sales Rule (TSR).  Because of the defendants’ limited ability to pay, full payment has been ordered suspended provided Timemark pays $5,000, Nagler pays $7,000, Gassaway pays $10,000, and defendants each paid a $1 civil monetary penalty.  CFPB

July 25, 2019

Douglas MacKinnon of Buffalo, New York, and associated individuals and entities in the debt collection business, including Northern Resolution Group, LLC, Enhanced Acquisitions LLC, Delray Capital, LLC, and Mark Gray, will pay more than $66 million in restitution and penalties in a settlement reached with New York state and the Consumer Financial Protection Bureau.  The companies routinely engaged in unlawful and predatory debt collection practices, including: misrepresenting to consumers that they owed sums they did not owe or were not obligated to pay, or that the companies did not have a legal right to collect; falsely threatening consumers with legal action that the collectors had no intention of taking; and, impersonating law enforcement and other government officials.  The settlement permanently bans MacKinnon and Gray and their defendant companies from the debt collection industry. CFPB, NY

Tagged in: Financial and Investment Fraud,

July 22, 2019

Credit reporting company Equifax has agreed to pay up to $700 million to resolve claims related to its 2017 data breach in a global settlement with the FTC, the CFPB, and 50 U.S. states and territories.  The settlement will be entered as a stipulated judgment in civil action pending against Equifax, alleging that Equifax failed to take adequate steps to secure its network and consumer data, despite being warned of network vulnerabilities, resulting in a hack that exposed the private information of almost 150 million people.  The settlement provides that defendant will pay between $300 million and $425 million to compensate affected consumers, in addition to a $100 million penalty to the CFPB and $175 million to the states.  Equifax also agreed to take specified steps to improve information security, subject to review by an independent third party.  FTC; CFPB; AG CA; AG NY; AG PA

Tagged in: Cybersecurity and Data Breaches, Financial and Investment Fraud,

October 24, 2018

A small-dollar lender that operates in Tennessee, Alabama, Kentucky, and Mississippi, has settled with the CFPB for allegedly violating the Consumer Financial Protection Act (CFPA). Cash Express, LLC allegedly sent letters to its customers to threaten them with lawsuits, misrepresented that it would report negative information to credit agencies, and withheld funds from cashed checks to satisfy prior loans. It has now been ordered to pay restitution of $32,000 as well as a $200,000 penalty. CFPB

Tagged in: Financial Institution Fraud,

July 20, 2018

The CFPB announced a proposed settlement with TCF National Bank regarding the bank’s marketing and sale of overdraft services. TCF allegedly obscured the overdraft fees it charged and made consenting to overdraft fees seem mandatory for new customers to open an account. TCF has agreed to pay $25 million in restitution to customers who were charged overdraft fees and has agreed to an injunction to prevent future violations. CFPB

Tagged in: Financial Institution Fraud,

June 13, 2018

South Carolina-based Security Group Inc. and two of its subsidiaries will pay a $5 million civil penalty to resolve charges they engaged in improper debt collection practices, including calling consumers at work and physically blocking them from leaving their homes. The settlement also resolves allegations the Security Group entities provided inaccurate and incomplete consumer data to credit reporting agencies. CFPB

Tagged in: Financial Institution Fraud,

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