On May 7, the U.S. Attorney for the Southern District of New York announced the filing of criminal mail and wire fraud charges against a debt settlement firm (Mission Settlement Agency), along with the firm's owner and three employees. The government alleges that the defendants engaged in a multi-million dollar scheme involving more than 1,200 customers who paid the company fees for its services. The charges include allegations that the company lied to prospective customers about fees charged for the company’s debt relief products; about the company's purported affiliation with the federal government and credit bureaus; and about the results the company had achieved for its customers.
On the same day the Consumer Financial Protection Bureau (CFPB) announced that a civil complaint had also been filed against the same company and its owner, along with another debt settlement company. The CFPB complaint alleges that the firms violated the FTC’s Telemarketing Sales Rule and the Dodd-Frank Act by charging consumers illegal advance fees for debt-settlement services. The CFPB seeks an order enjoining the operations, an assessment of civil penalties, and relief for the companys' customers.
According to the CFPB's press release, the agency initiated its investigation into these matters in July 2012, and thereafter made a criminal referral to the U.S. Attorney's Office. The release states that the CFPB "is required by the Dodd-Frank Act to refer evidence of criminal activity to the Department of Justice. In connection with these actions, the CFPB has also received substantial assistance from the New York Office of the U.S. Postal Inspection Service."