CFPB Seeks $43M in Fines, Restitution From Debt Relief Co. Owner

The Consumer Financial Protection Bureau has filed a motion for summary judgment, seeking to recover $43 million in restitution and penalties from the owner of a debt relief firm that was sued back in 2020 for taking money from individuals before achieving any of the results it promised and before it was legally able to do so under the Telemarketing Sales Rule, and deceiving individuals about the services that were going to be provided.

A copy of the motion and the supporting memorandum in the case of CFPB v. FDATR et al. can be accessed by clicking here and here.

FDATR failed to answer the complaint and the CFPB was awarded default judgment earlier this year. The owners of the company, Kenneth Halverson and Dean Tucci, were also named in the complaint. Halverson passed away last year, leaving Tucci, who “founded and controlled every aspect” of the company as the sole named defendant. In its motion, the CFPB is seeking $2.1 million in restitution and $41.1 million in civil money penalties against Tucci.

In the memorandum, the CFPB details all the reasons why Tucci should not be shown any favor in lessening the size of the civil penalty. FDATR was sued by the State of Illinois in 2017, putting it on notice of its illegal conduct, yet the company continued doing so through at least April 2019, according to the CFPB. And, any of the mitigating factors that can be used to adjust the size of the penalty are not relevant, according to the memorandum. Tucci did not act in good faith, according to the CFPB, and his cooperation during the investigation was minimal. He did not provide any financial information to the CFPB, and he victimized thousands of individuals who were financially distressed through false promises and a “business model designed to mislead consumers.”

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