CFPB Sues Prime Marketing Holdings for Misleading Marketing and Illegal Fees
The Consumer Financial Protection Bureau has filed a lawsuit against Prime Marketing Holdings for misleading consumers about its credit repair services and charging illegal advance fees before the services were completed. The CFPB is requesting the company cease its harmful and illegal behaviors, and is seeking compensation for consumers affected by the practices.
There are several different allegations in the lawsuit. Prime Marketing Holdings allegedly collected fees in advance for credit repair services before they had been completed. Federal laws prevent telemarketing companies from collecting these fees until certain services have been delivered. Some consumers were charged “hundreds of dollars” in setup fees, in addition to monthly fees as high as $89.99.
The suit claims the company misled consumers about the benefits they would gain from the credit repair services. The company suggested they would be able to remove negative elements of a consumer’s credit report or increase the credit score without having an actual method for doing that.
Consumers were also mislead about the continued cost of their credit repair services, such as the monthly fee. Consumers were charged monthly fees automatically, even though many were told they would only be charged if they opted to continue service after 60 days. Prime Marketing Holdings did offer a money back guarantee, but they failed to disclose that the guarantee only applied to people who had used their services for at least six months.
More information about the lawsuit can be found in the official complaint document.