The Consumer Financial Protection Bureau filed a lawsuit this week against a Van Nuys, Calif., credit repair company for deceptively marketing its services and charging consumers illegal fees.
The lawsuit, filed Thursday, alleged that Prime Marketing Holdings engaged in deceptive acts and practices and violated the Telemarketing Sales Rule by charging illegal fees and making deceptive statements.
The agency is seeking to halt the company's conduct and refund fees to consumers.
"Today we are taking action against Prime Marketing Holdings for luring consumers with misleading claims about its ability to repair credit files and then charging illegal fees," CFPB Director Richard Cordray said in a press release.
Prime Marketing operates under various names including Park View Credit, National Credit Advisors and Credit Experts. Nirit Rubenstein, Prime Marketing's CEO, who formerly served as a general manager at prepaid card company Green Dot, did not return a call seeking comment.
The company misled consumers and made unsubstantiated claims that it could remove derogatory information from credit reports and boost credit scores by over 100 points, according to the complaint.
Prime Marketing targeted consumers who had applied for a home loan, a refinancing or other credit. It charged an initial set-up fee of several hundred dollars and an $89.99 monthly fee before providing consumers with documentation. It also claimed to have a money-back guarantee but its sales contracts limited the ability of consumers to get refunds.
The CFPB also released a consumer advisory Friday with tips for consumers who are trying to improve their credit or are dealing with credit repair firms.