The Consumer Financial Protection Bureau has secured a $21 million default judgment against a group of defendants that it accused of engaging in a fake debt relief scam.
The defendants — Federal Debt Assistance Association LLC, Financial Document Assistance Administration Inc., Clear Solutions Inc. and their owners Robert Pantoulis, Vincent Piccione and David Piccione — did not show up or defend themselves against the CFPB.
The CFPB filed the suit last October in a District Court for the District of Maryland. A copy of the default judgment order can be accessed by clicking here.
In marketing their services, the defendants said they could reduce the principal balances of consumers’ unpaid debts by as much as 60% and increase the credit scores of those consumers — claims that were ultimately not true. The defendants also told individuals to stop making payments on their unpaid debts and took payments from individuals before they had performed any services, before the individual had made one payment into the plan, or which were not proportional to the amount being saved.
Individuals made almost $5 million in payments to the defendants, which was ordered to be repaid, and the CFPB tacked on an additional $16 million civil penalty for good measure.
The defendants are also permanently barred from engaging in any debt relief or credit repair service.
