American Fair Credit Council Applauds CFPB Enforcement Action

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Industry Trade Group Repeats Support for FTC’s Ban on Advance Fees

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“We are delighted to see the CFPB taking action against firms that, by taking advance fees, tarnish the reputation of legitimate debt resolution companies,” said Robert Linderman, Vice President of the Executive Board and Legislative Director of the AFCC

The American Fair Credit Council (AFCC), the industry trade group representing the consumer debt resolution industry, today applauded the actions of the Consumer Financial Protection Bureau (CFPB) against Premier Consulting Group LLC. The CFPB announced yesterday that it has asked a federal district court to enter a consent order against Premier and certain individuals and related companies for charging consumers illegal up-front fees for debt settlement services that were never in fact provided (reference number 12376777). The CFPB’s release may be found here:

http://www.consumerfinance.gov/newsroom/cfpb-takes-action-against-debt-settlement-firm

The “advance fee prohibition” came into effect as the result of the Federal Trade Commission’s (FTC) amendment of its Telemarketing Sales Rules. Those amendments made it unlawful, as of October 27, 2010, for any debt settlement services provider to charge or accept fees in advance of delivering actual settlements of a consumer’s debts. The AFCC worked closely with the FTC in crafting the advance-fee ban and was the first organization to publicly announce its support for the rule changes.

“We are delighted to see the CFPB taking action against firms that, by taking advance fees, tarnish the reputation of legitimate debt resolution companies,” said Robert Linderman, Vice President of the Executive Board and Legislative Director of the AFCC. Linderman continued, “Since the FTC rule went into effect, the AFCC has made numerous enforcement referrals to the CFPB and the FTC of persons suspected of violating the rule, and we will continue to do so. Membership in the AFCC is strictly limited to companies who pledge, publicly, to adhere to the FTC’s advance-fee ban.”

In addition to its enforcement referral activities, the AFCC works to pass state legislation that mirrors the FTC rules, to ensure that consumers in intra-state transactions are protected to the same extent as consumers in inter-state transactions. “The FTC rules work,” said Robby H. Birnbaum, President of the AFCC’s Executive Board. “Consumers at the state level shouldn’t have to pay advance fees simply because an unscrupulous provider chooses to exploit the FTC’s jurisdictional limits in an unlawful manner.”

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