The CFPB recently filed an enforcement complaint and stipulated judgment against a Florida-based debt services company, which represents the first of its kind alleging that the company is liable under Dodd Frank and the Telemarketing Sales Act for deceptive and abusive telemarketing practices.
On May 30, 2013, the CFPB issued the latest in a line of enforcement actions arising out of thousands of pages of new regulations. In this installment, the CFPB sued Florida-based American Debt Settlement Solutions, Inc. and its owner for alleged violations of the Consumer Financial Protection Act of 2010 and the Telemarketing Sales Act.1 This action represents the first of its kind with the entry of a stipulated judgment imposing more than $500,000 in damages and civil penalties, together with injunctive relief, based on allegations that the company engaged in “abusive acts or practices” under Dodd Frank.
As this case makes clear, the CFPB’s new regulations and enforcement actions are sweeping across all aspects of the financial services industry. As a former deputy comptroller of the currency who sits on the CFPB consumer advisory board recently stated: “It’s possible everything you have been doing might be illegal.” 2
1. A copy of the Complaint may be retrieved from the following link: http://files.consumerfinance.gov/f/201305_cfpb_complaint_adss.pdf.
2. Lew Sichelman, Everything Might be Illegal, Mortg. Banking, May 2013, at 22.