Last Thursday, December 4, 2014, the Consumer Financial Protection Bureau (CFPB) reached a settlement agreement with Premier Consulting Group LLC and the Law Office of Michael Lupoloverrequiring the defendants to pay a fine of roughly $69,000 for allegedly charging consumers illegal upfront fees for debt relief services. The Telemarketing Sales Rule prohibits companies from collecting fees for debt relief services in advance of any settlement. 16 C.F.R. § 310.4(a)(5)(i).
The complaint in this matter, filed in May 2013, alleges that Premier collected approximately $187,000 from consumers in advance of settling any debts, and that the Law Office of Michael Lupolover collected $112,000. In addition to the monetary penalty, the settlement agreement also requires the defendants to comply with additional steps to prevent future violations, including the submission of a compliance plan, reporting requirements and expanded record retention policies.
In addition, the complaint alleged that two defendants not included in last week’s settlement agreement, Mission Abstract LLC and Michael Levitis, impersonated a government agency when dealing with consumers and gave false statements regarding fees for their debt relief services. These charges led to the CFPB’s first criminal prosecution referral when the U.S. Attorney for the Southern District of New York brought mail and wire fraud charges against Mission, Levitis and five employees. Levitis was sentenced in November 2013 to nine years in prison and was ordered to forfeit $2.2 million and pay a $15,000 fine.