On October 12, 2017, the CFPB filed a Complaint in the United States District Court for the District of Maryland against two companies operating under the name “FDAA,” along with their owners and a service provider. These companies claim to provide advice and assistance to consumers to eliminate all or a portion of their debt and improve their credit score. 

According to the CFPB’s Complaint, these FDAA companies lied about having an affiliation with the federal government in an attempt to persuade financially vulnerable customers into paying thousands of dollars in illegal advance fees. Mailers from the companies stated that they were a “regulatory notification” and included a seal similar to the Great Seal of the United States. The companies maintained a “debt validation” program in which the companies told consumers that their debt would be eliminated or reduced if the creditor did not respond to the companies’ satisfaction, even though creditors are not permitted to contact consumers after a debt has been disputed.

Additionally, the FDAA companies falsely advertised that they could reduce consumers’ debts by 60%. The FDAA companies also instructed consumers to stop making debt payments without disclosing that not making payments could result in being sued or having their debt increase. Finally, federal law prohibits the collection of certain fees by debt collection entities before certain results are achieved, yet the FDAA companies charged certain fees without achieving the promised results. 

To read the Complaint in full, visit https://s3.amazonaws.com/files.consumerfinance.gov/f/ documents/201710_cfpb_FDAA-complaint.pdf