On June 29, 2021, the CFPB and the Attorney General of the State of Georgia filed a proposed order in connection with a joint lawsuit they filed a day earlier in federal district court in Georgia against Maryland-based debt-relief and credit-repair company Burlington Financial Group (“Burlington”) and three individual owners and executives. In the lawsuit, the CFPA and Georgia AG alleged that Burlington offered to provide debt-relief and credit-repair services to consumers throughout the United States through telemarketing and telephone sales but instead used deceptive tactics to defraud consumers.
The CFPB and Georgia AG claimed that the defendants violated the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, and the Consumer Financial Protection Act by, inter alia, falsely promising to help their customers reduce their credit-card debts and improve their credit scores. The complaint identifies numerous misleading schemes initiated by the defendants, including misrepresenting material aspects of the debt-relief and credit-repair services that Burlington offered, sold or provided to customers; misleading customers on the promised results and, in some instances, not providing the promised services at all; and misleading customers on expected results by failing to track Burlington’s own results, thereby precluding the defendants from having any way of knowing whether Burlington had achieved the promised results. The CFPB and Georgia AG alleged that the defendants’ tactics often left their customers “with increased debts, impaired credit scores, and, in some instances, exposed to creditor lawsuits and bankruptcy.”
The proposed order provides for a total civil money penalty of $150,001, of which $15,000 will be remitted to the State of Georgia, and a judgment for redress of at least $30 million to be suspended upon payment of the $150,001 civil money penalty. It would also permanently ban the defendants from telemarketing any consumer financial product or service and from offering, marketing, selling, or providing any financial-advisory, debt-relief, or credit-repair service.