CFPB asks $1.4 million fine against Meracord
Oct. 4, 2013 – CFPB on Thursday announced it was seeking a $1.376 million civil money penalty fine from Meracord LLC, a leading debt-settlement payment processor, for allegedly helping other firms collect millions in illegal up-front fees from consumers.
The bureau is seeking this fine and a halt to illegal activity in a proposed consent order filed in federal district court. Meracord and its CEO and owner Linda Remsberg are both named and have agreed to the order.
CFPB charges that Meracord and Remsberg violated the Telemarketing Sales Rule by helping debt-settlement companies charge consumers upfront fees. The rule prohibits debt-settlement companies from charging consumers such fees before settling any of their debts. The goal is to protect consumers from paying for services that may never materialize.
According to the CFPB’s complaint, Meracord processed thousands of illegal advance fees since October 2010. The bureau believes Meracord helped debt-settlement companies charge millions of dollars in unlawful fees to more than 11,000 consumers in multiple states. Nearly 5,000 of those consumers’ accounts were closed without any of their debts being settled.
The order would bar Meracord and Remsberg from processing payments for debt-settlement companies and for members of the related mortgage-settlement industry. They would be subject to monitoring by the CFPB and would be required to make reports to the CFPB to ensure their compliance. This is in addition to paying a civil money penalty of $1.376 million.
Proposed consent order
Announcement by CFPB
Remarks by CFPB Deputy Director Steve Antonakes