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MADISON — Attorney General J.B. Van Hollen has announced that his office has obtained, as part of a joint enforcement action with the Consumer Financial Protection Bureau (CFPB) and other state Attorneys General, an order from the federal district court in Miami, requiring a nationwide debt-relief services company to refund up to $100,000 to consumers who were unlawfully charged advance fees for debt-settlement services.
“We estimate more than 80 customers were affected here in Wisconsin,” Attorney General Van Hollen said. “Our Consumer Protection Unit, in cooperation with other federal and state partners, will continue to work on behalf of Wisconsin residents who have been wronged by businesses that engage in unlawful practices, and to prevent other businesses from doing similar acts.”
The investigation by the CFPB found evidence that the defendant, Payday Loan Debt Solution, Inc. (PLDS), routinely charged consumers upfront fees prior to settling the consumers' debts. This practice violates the Federal Trade Commission's Telemarketing Sales Rule, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and various state laws. Upon being informed of the Bureau's joint investigation, PLDS cooperated with the CFPB and immediately ceased its unlawful conduct.
At the request of the CFPB and the five state law enforcement agencies, the court is ordering PLDS to provide a full refund, $100,000 in total, to consumers who were charged advance fees, but who received no debt-settlement services from PLDS by the time their accounts were closed. Additionally, the order requires PLDS to pay a $5,000 penalty to the CFPB Civil Penalty Fund and prohibits PLDS from engaging in unlawful conduct in the future.
The Attorneys General of New Mexico, North Carolina, North Dakota, and Wisconsin and the State of Hawaii Office of Consumer Protection joined the CFPB's lawsuit, making this the Bureau's first joint-enforcement action with the states. Assistant Attorney General Lara Sutherlin represents the State of Wisconsin in this matter.
A copy of the complaint is available: