Sued or Sanctioned

CFPB Sues Student Loan, Credit Repair, and Debt Settlement Company

Written by Steve Rhode

Today, the Consumer Financial Protection Bureau (Bureau) filed a lawsuit against FDATR, Inc., and its owners, Dean Tucci and Kenneth Wayne Halverson. The Bureau alleges that FDATR, Tucci, and Halverson violated the Telemarketing Sales Rule (TSR) by engaging in deceptive and abusive telemarketing acts or practices and the Consumer Financial Protection Act of 2010 (CFPA) through deceptive acts or practices.

FDATR was a corporation headquartered in Wood Dale, Illinois, that promised to provide student-loan debt-relief and credit-repair services to consumers nationwide. Tucci and Halverson both owned and managed FDATR, which was involuntarily dissolved in September 2020.

The Bureau’s complaint, filed in the United States District Court for the Northern District of Illinois, seeks injunctions against FDATR, Tucci, and Halverson, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties.

The Bureau specifically alleges that from 2011 through at least April 2019, the defendants engaged in abusive telemarketing by requesting and taking payments from consumers for debt-relief and credit-repair services before achieving the results it promised and before it was legally allowed to do so under the TSR.

The Bureau also alleges that during this same period, the defendants used deception in violation of the TSR and CFPA to attract consumers by misrepresenting material aspects of its student-loan debt-relief services. For example, the defendants falsely represented that its services would reduce or eliminate student-loan payments and improve credit scores.

The Bureau further alleges that defendants’ violations of the TSR constituted violations of the CFPA. In addition, the Bureau alleges that Tucci and Halverson are individually liable under the TSR and CFPA because they knew of, directed, and engaged in the violations described in the complaint and substantially assisted FDATR.

Even Though the Company is Closed the CFPB is After Responsible Parties

The CFPB complaint says, “Dean Tucci was an owner or officer of, or had managerial responsibility over, FDATR, ” and “In July 2017, Tucci transferred FDATR’s ownership to Halverson for $0, but he continued to work for the company until 2019 as a “consultant” with managerial responsibility over, among other things, FDATR’s day-to-day operations.”

“Kenneth Wayne Halverson was an owner, officer, or manager of FDATR. Halverson joined FDATR in 2016 as an officer and sales floor manager. He managed the company’s day-to-day operations and took control of the company when Tucci transferred ownership to him in 2017. He purportedly closed the company in 2019.”

Those facts should make some people shake a little to know they can’t put bad acts behind them by getting out of the business of debt relief.

The CFPB also says,”FDATR offered and provided student-loan debt-relief and credit-repair services to nationwide from 2011 until at least April 2019.

FDATR solicited consumers through radio and television commercials as well as website, fedslrelief.com, and through Facebook ads that linked to the website.

On both the website and in Facebook advertisements, FDATR claimed that its

  • Reduce or Eliminate Y our Payments;
  • Stop Wage Garnishment;
  • Lift IRS Tax Liens; and
  • Improve Credit Scores.

On its website, FDATR additionally claimed that it would:

  • Cut Loan Payments in HALF;
  • Restore Financial Aid Eligibility;
  • Remove I9 Rating; and
  • Restore your ability to get your Diplomas & Transcripts.”

The complaint also states, “For consumers that enrolled in services, FDATR’s telemarketing-sales agents caused electronic documents, including a contract, a power-of-attorney form, and an invoice, to be sent to the enrolling consumer through FDATR’s customer-management platform.

Before sending those documents to prospective customers, FDATR, through its telemarketing-sales agents, charged the customer, typically $1 or $99, purportedly to ensure that it had a valid payment method on file.

For its services, FDATR typically charged customers a minimum of $499 as a one-time payment within two to three weeks of enrollment or $600 paid in installments over a three-to-six-month period, with customers typically making the first payment within days or weeks of enrollment.”

On the credit repair front, it seems the CFPB noticed a bit of a technical issue when they said, “FDATR had no basis to assert that its services would result in improved credit scores or the removal of negative credit-status codes or ratings from credit reports. In fact, FDATR did no work to improve consumers’ credit scores or to remove negative credit-status codes or ratings from credit reports. And FDATR did not track whether its services achieved these promised results. FDATR did not check consumers’ credit scores before or after the company performed services for consumers and had no way of knowing how, or to what extent, even a successful loan consolidation would impact a consumer’s credit score.”

You can read the full complaint below.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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