Richard Cordray, director of the Consumer Financial Protection Bureau, says they were "wolves in sheep's clothing": purported "debt settlement" firms that sought out financially distressed consumers, often through misleading means, but made things worse for them rather than better.
The CFPB says one of the firms, Mission Settlement Agency, routinely sent letters marked with the Great Seal of the United States and claiming to be from a nonexistent "Office of Disbursement."
With help from federal prosecutors and the U.S. Postal Inspection Service, the CFPB filed suit today seeking to shut down the two operations, based in New York and New Jersey. It says the businesses targeted consumers "in multiple states" via mail and phone or via the Internet, and charged them illegal advance fees for mostly worthless services.
The CFPB sued Mission and its principal, Brooklyn lawyer Michael Levitis, as well Premier Consultant Group LLC and the Law Office of Michael Lupolover. Cordray said in a statement:
Mission Settlement Agency purported to provide debt-relief services to consumers, but in reality we believe it provided little or no debt relief to the consumers it charged. We also believe that Mission impersonated a government agency and charged unlawful advance fees to consumers, all at the direction of its principal, Michael Levitis. We believe that Mr. Levitis told employees to sign up consumers by any means, including lies about the cost and timing of fees. Our complaint, filed in federal court today, alleges that once consumers were enrolled, Mission charged them unlawful advance fees, but provided few actual debt-relief services.
Like Mission, we believe that Premier Consultant Group, the Law Office of Michael Levitis, and the Law Office of Michael Lupolover also charged illegal up-front fees that made it difficult and, in some cases, impossible for consumers to settle their debts.
These wolves in sheep’s clothing take money from consumers who are already struggling to pay their bills, falsely promising them help while really making their problems worse.
The bureau accuses both firms of violating the Federal Trade Commission’s Telemarketing Sales Rule. In addition, it says that Mission and Michael Levitis "engaged in deceptive and unfair practices in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act."
You can find the complaint here. Click here and here for warnings about misleading claims from debt-settlement and debt-relief firms.