[author: Susan Nikdel]
On November 20, 2020, the CFPB filed a lawsuit against a student-loan debt-relief company, FDATR, Inc., and its owners, Dean Tucci and Kenneth Wayne Halverson. FDATR was an Illinois company that involuntarily dissolved in September 2020. Through telemarketing and telephone sales, FDATR promised to provide student-loan debt-relief and credit-repair services to consumers.
The complaint, filed in an Illinois federal district court, alleges that FDATR and its owners violated the Telemarketing Sales Rule (TSR) by engaging in deceptive and abusive telemarketing acts or practices and violated the Consumer Financial Protection Act of 2010 (CFPA) by engaging in deceptive acts or practices. According to the complaint, defendants requested and received payments from consumers for debt-relief and credit-repair services before achieving the results the company promised and before it was legally allowed to do so under the TSR and falsely represented in violation of the TSR and CFPA that the company’s services would reduce or eliminate student-loan payments and improve credit scores.
The complaint alleges that FDATR would charge customers an initial fee between $1 and $99 to ensure there was a valid payment method on file, and then would typically charge a minimum of $499 as a one-time payment within two to three weeks of enrollment or $600 paid in installments over three to six months. It also alleges that while the company promised it could improve consumers’ credit scores or help remove negative credit status codes or ratings from credit reports, the company did no work to achieve the results it promised. The complaint further alleges that Tucci and Halverson are individually liable under the TSR and CFPA because they knew of, directed, and substantially assisted in these violations. The alleged misconduct purportedly took place between 2011 and 2019.
The complaint seeks injunctions against FDATR, Tucci, and Halverson, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.
