The CFPB and the Massachusetts Attorney General’s Office have filed a lawsuit against a credit repair company and the company’s individual owner in federal district court in Massachusetts.  The complaint alleges that the defendants engaged in deceptive acts or practices in violation of Consumer Financial Protection Act (CFPA) and the Massachusetts Consumer Protection Law, deceptive and abusive telemarketing acts and practices in violation of the Telemarketing Sales Rule (TSR), and acts or practices in violation of the Massachusetts Credit Services Organization Law (CSO Law).

According to the complaint, the company collected fees from consumers before achieving the credit repair results it represented that it could provide on its website, in online advertisements, and in its customer agreements.  Such results included the removal of negative information from consumers’ credit reports and improvement of consumers’ credit scores.  The complaint alleges that the defendants’ representations were false or misleading.  It also alleges that the company did not maintain a surety bond as required by the CSO Law or provide disclosures required by the CSO Law.

The new complaint is the latest indication that credit repair services continue to be a CFPB enforcement focus under Director Kraninger’s leadership.  The adverse economic effects of the COVID-19 pandemic on consumers is likely to result in increased CFPB’s scrutiny of credit repair companies, including those targeting student loan borrowers.