- Does Money Lingo Make Your Head Spin? Here’s What It Really Means
- Budget from 1987 Tells the Tale: Americans Are Severely Underpaid
- Trick-or-Treaters Want Cash, Not Treats
- Fast-Food Workers (McDonald’s Included) Earn $20 an Hour in Denmark
- Delinquent Doctors Publicly Outed for Unpaid Student Loans
- 6 Ways to Ensure You’ll Have Enough Money in Retirement
- How Do Mistakes Get Removed From Your Credit Reports?
- Your Early Holiday Present: Gas at $3 a Gallon or Less
The three-year-old Consumer Financial Protection Bureau is again breaking new ground — and the target is a debt settlement company.
While the consumer protection agency has filed a civil suit against New York-based Mission Settlement Agency, federal prosecutors have filed charges against Mission in the first criminal case ever referred by the CFPB, Reuters says.
“There is nothing to get the attention of people who are dedicating their lives to committing fraud like knowing that they could end up in prison,” said CFPB director Richard Cordray, alluding to further criminal cases to come. “There will be more.”
We’ve long criticized the debt settlement industry, whose reputation has been damaged by many bad actors. Until the CFPB came along, it was a largely unregulated industry.
From mid-2009 through March 2013, about 2,200 customers paid nearly $14 million to Mission. The company took $6.6 million in fees from those customers and paid approximately $4.4 million to creditors. For more than 1,200 customers, the company allegedly took nearly $2.2 million in fees and “never paid a single penny to the customers’ creditors,” the indictment says.
The indictment also names company owner Michael Levitis and three employees. Levitis was using the money to, among other things, cover the operating costs of a Brooklyn nightclub, make lease payments on two Mercedes, and pay his mother’s credit card bills, the indictment said.