The Consumer Financial Protection Bureau and the Attorney General of Georgia yesterday announced a consent order with a debt relief and credit repair company and its owners that were accused of deceiving consumers into hiring the company to lower or eliminate credit card debt and improve the consumers’ credit scores. Under the terms of the consent order, the parties will be banned from the telemarketing any consumer financial product and selling debt relief or credit repair services while also paying a fine of $150,001, while a penalty of more than $30 million to repay affected consumers is being suspended.
A copy of the consent order against Burlington Financial Group and its owners, Richard Burnham, Katherine Burnham, and Sang Yi can be accessed by clicking here.
The company is accused of scamming more than 6,000 consumers out of $30 million between 2016 and 2019. Even though it promised to use a legally vetted process to eliminate debt, it did not invalidate, eliminate, or lower any consumer debt, according to the CFPB, despite charing upfront fees equal to 40% of the total amount of debt owed. Consumers were told to stop paying their debts, which led some consumers to face collection lawsuits and have their credit scores damaged.
Even though it promised to help improve consumers’ credit scores, the defendants never even checked or tracked them, and, because of the advice they provided, the credit scores for many of the defendants’ customers actually went down.
“For more than three years, Burlington Financial used deceptive telemarketing tactics to defraud vulnerable people into believing the company could eliminate their credit-card debts and improve their credit scores,” said CFPB Acting Director Dave Uejio based on the allegations in the Bureau’s complaint. “We will continue to investigate and seek justice for victims of companies that lie, cheat, and steal from people who they claim to be helping.”
