FTC and Regulatory Actions Against Debt Relief Companies

Why I Track Enforcement Actions

Enforcement actions tell you three important things:

1. What scams look like – The same patterns appear in case after case
2. Which companies got caught – Before you hire anyone, search for enforcement history
3. That enforcement exists – These aren’t victimless crimes; people fight back

When I see a new company, I check for FTC actions, CFPB complaints, state attorney general lawsuits, and BBB complaints. You should too.

Major Debt Settlement Enforcement Actions

Debt settlement companies have been hit with major FTC enforcement for:

• Charging illegal upfront fees (telemarketing sales rule violations)
• False claims about success rates
• Failing to disclose risks (lawsuits, tax consequences)
• Misrepresenting time to complete program

Credit Repair Enforcement Actions

Credit repair companies shut down for:

• Selling CPNs (Credit Privacy Numbers) – federal crime
• Tradeline piggybacking schemes
• Promising to remove accurate negative information
• Charging before services rendered

Student Loan Scam Enforcement

Student loan relief scams busted for:

• “Obama forgiveness” lies
• Charging for free government applications
• Stealing FSA credentials
• Fake consolidation programs

CFPB Actions

The Consumer Financial Protection Bureau has its own enforcement arm targeting:

• Debt collectors violating FDCPA
• Student loan servicer misconduct
• Credit repair fraud
• Unfair lending practices

State Attorney General Actions

State AGs often move faster than federal agencies:

How to Check a Company Before Signing

Common Patterns in Enforcement Actions

After tracking these cases for 30 years, I see the same patterns:

What Happens in FTC Cases

Typical FTC enforcement action results:

• Temporary restraining order – Operations frozen
• Asset freeze – Can’t move money
• Receiver appointed – Third party takes over
• Settlement or judgment – Often millions in damages
• Consumer redress – Victims may get partial refunds
• Industry ban – Principals banned from the industry

Related Guides

Get Help

Recently Updated

Comprehensive FTC Actions Index

Debt Settlement Enforcement

Credit Repair Enforcement

Student Loan Scam Enforcement

CFPB Actions

State AG Actions

Frequently Asked Questions About FTC Enforcement

How do I check if a company has FTC actions against it?

Search Google for “[company name] FTC” or visit ftc.gov and search their case database. Also check CFPB complaints at consumerfinance.gov and search for state attorney general actions.

What happens to consumers when a company gets shut down?

The FTC often seeks consumer redress—partial refunds from seized assets. But recovery is rarely 100%. Money already spent or transferred may be unrecoverable. This is why prevention is better than enforcement.

Are these companies actually sent to jail?

FTC civil actions don’t result in jail time, but criminal referrals happen. CPN schemes in particular have led to federal criminal charges and prison sentences.

How do scam companies keep operating?

Principals from shut-down companies often start new ones under different names. The FTC sometimes includes industry bans in settlements, but enforcement is challenging. Always research before signing.

Can I report a debt relief scam?

Yes. Report to: FTC at ReportFraud.ftc.gov, CFPB at consumerfinance.gov/complaint, and your state attorney general. Reports help build cases for enforcement.

Why do debt relief scams keep happening?

Desperate people are vulnerable, the industry is fragmented, enforcement is resource-limited, and scammers simply start new companies. That’s why consumer education is so important.

How much money has the FTC recovered for consumers?

The FTC has recovered billions in consumer redress over the years, though individual cases vary widely. Large debt relief cases often involve tens of millions in judgments, though actual collections may be less.

Steve Rhode The Get Out of Debt Guy | Consumer Debt Expert

Consumer debt expert & investigative writer. Personal bankruptcy survivor (1990). Washington Post award-winning author. Exposing debt scams since 1994.

See Full Bio

How to Get out of Debt Money Troubles Money Personalities Budgeting Behavioral Economics Motivation Inspiration Money Management The History of Credit and Debt Getting Out of Debt Get Out of Debt Debt Settlement Credit Counseling Loan & Debt Relief Scams Debt Relief Industry Practices Exposing Deceptive Financial Services Helping Consumers Navigate Financial Hardship Consumer Advocacy Consumer Debt Expert Consumer Protection Debt Relief Scam Student Loan Bankruptcy Debt Validation Debt and Mental Health Student Loans Debt Consolidation Debt in the Military Bankruptcy Consumer Debt Credit Card Debt Debt Relief Scams Personal Finance YMYL Financial Content Chapter 7 Bankruptcy Chapter 13 Bankruptcy Medical Debt Student Loan Debt Consumer Bankruptcy Financial Fraud Exposure Collections Investigative Writing Fraud investigation True Crime Research