CFPB: Payment processor to pay $6 million in consumer relief

August 27, 2014

Aug. 27, 2014 – CFPB on Monday announced enforcement action against debt-settlement payment processor Global Client Solutions for allegedly helping other companies collect illegal fees from consumers, requiring the company and owners to pay more than $6 million in consumer relief and a $1 million civil penalty.

“Global Client Solutions made it possible for debt-settlement companies across the country to charge consumers illegal fees,” said CFPB Director Richard Cordray in a statement. “Consumers struggling to pay off a debt are among the most at risk and deserve better. We will continue to crack down on illegal debt-settlement firms and the companies that help these operations collect illegal fees from consumers.”

CFPB noted in its statement that “Global Client Solutions and its two principals, Robert Merrick and Michael Hendrix, violated the Telemarketing Sales Rule by making it possible for debt-settlement companies to charge consumers illegal upfront fees.” This rule prohibits debt-settlement companies from charging consumers advance fees before settling their debts. CFPB said that the debt-settlement company, and the other companies it helped, collected tens of millions of dollars illegally from consumers.

CFPB asked a federal district court to approve a consent order requiring the company and its two owners to halt illegal activity and pay more than $6 million in relief to consumers and $1 million in a civil money penalty.

 

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