Consumer Financial Protection Bureau v. Prime Marketing Holdings, LLC

Filing 86

STIPULATED FINAL JUDGMENT AND ORDER by Judge Beverly Reid O'Connell that Defendant and its officers, agents, servants, attorneys, and employees who have actual notice of this Order, whether acting directly or indirectly. Defendant, whether actin g directly or indirectly, is permanentlyrestrained. A judgment for a civil money penalty is entered in favor of the Bureau and against Defendant in the amount of $150,000. (SEE ATTACHMENT FOR FURTHER DETAILS) Related to: Stipulation for Judgment 85 . (MD JS-6, Case Terminated). (jp)

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1 JS-6 2 3 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 4 5 Consumer Financial Protection Bureau, 6 Plaintiff, 7 v. 9 Prime Marketing Holdings, L.L.C. (d.b.a. Park View Credit, National Credit Advisor, and Credit Experts), 10 Case No. 2:16-cv-07111-BRO (JEM) Defendant. 8 STIPULATED FINAL JUDGMENT AND ORDER 11 12 13 14 15 16 17 18 19 20 Plaintiff, the Consumer Financial Protection Bureau (“Bureau”) commenced this civil action against Defendant Prime Marketing Holdings, L.L.C. (d.b.a. Park View Credit, National Credit Advisor, and Credit Experts) on September 22, 2016, to obtain injunctive relief, damages and other monetary relief, and civil money penalties. The Second Amended Complaint (“Complaint”) alleges violations of §§ 1031(a) and 1036(a)(1) of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5531(a), 5536(a)(1), and the Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, which implements the Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108. 1 1 2 Plaintiff and Defendant request that the Court enter this Stipulated Final Judgment and Order (“Order”). 3 4 5 6 FINDINGS 1) This Court has jurisdiction over the parties and the subject matter of this action. 2) Plaintiff and Defendant agree to entry of this Order to settle and 7 resolve all matters in this dispute arising from the conduct alleged in the Complaint 8 to the date this Order is entered. 9 3) Defendant neither admits nor denies any allegations in the Complaint, 10 except as specifically stated in this Order. For the purposes of this Order, 11 Defendant admits the facts necessary to establish the Court’s jurisdiction over it 12 and the subject matter of this action. 13 4) Between October 1, 2014 and at least June 30, 2017, Defendant has 14 charged over 50,000 consumers over $20 million for credit repair services, and 15 returned approximately $1.5 million of these fees to consumers through either 16 refunds or chargebacks. Defendant caused harm in the amount of the total fees 17 consumers paid, less any refunds they received. 18 5) Defendant waives all rights to seek judicial review or otherwise 19 challenge or contest the validity of this Order. Defendant also waives any claim it 20 may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the 2 1 prosecution of this action to the date of this Order. Each party will bear its own 2 costs and expenses, including without limitation attorneys’ fees. 3 6) Entry of this Order is in the public interest. 4 5 DEFINITIONS 7) The following definitions apply to this Order: 6 a) 7 Defendant for Credit Repair Services from October 1, 2014 to the 8 Effective Date of this Order. 9 b) “Affected Consumers” includes any consumer who paid fees to “Credit Repair Services” means any good or service that is 10 represented to remove derogatory information from, or improve, a 11 person’s credit history, credit record, or credit rating. 12 c) 13 Park View Credit, National Credit Advisor, Credit Experts, and PMH 14 Credit Repair) and its successors and assigns. 15 d) 16 on the docket by this Court. 17 e) 18 Office of Enforcement for the Consumer Financial Protection Bureau, 19 or his/her delegate. “Defendant” means Prime Marketing Holdings, L.L.C. (d.b.a. “Effective Date” means the date on which this Order is entered “Enforcement Director” means the Assistant Director of the 20 3 1 f) “Related Consumer Action” means a private action by or on 2 behalf of one or more consumers or an enforcement action by another 3 governmental agency brought against Defendant based on 4 substantially the same facts as described in this Order or the 5 Complaint. 6 7 8 9 ORDER IT IS ORDERED that: I. 8) Conduct Prohibition Defendant and its officers, agents, servants, attorneys, and employees 10 who have actual notice of this Order, whether acting directly or indirectly, may not 11 violate §§ 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536, and the TSR, 12 16 C.F.R. pt. 310, in the provision of Credit Repair Services. 13 9) 14 restrained from: Defendant, whether acting directly or indirectly, is permanently 15 a) 16 selling, assisting in the sale of, or administering Credit Repair 17 Services; or 18 b) 19 holding any ownership interest in, providing services to, or working in 20 any capacity for any person engaged in or assisting in advertising, Advertising, marketing, promoting, providing, offering for sale, Receiving any remuneration or other consideration from, 4 1 marketing, promoting, offering for sale, or selling Credit Repair 2 Services. 3 4 II. Customer Information 10) Defendant, and its officers, agents, servants, employees, and attorneys 5 who receive actual notice of this Consent Order, whether acting directly or 6 indirectly, may not disclose, use, or benefit from customer information, including 7 the name, address, telephone number, email address, social security number, other 8 identifying information, or any data that enables access to a customer’s account 9 (including a credit card, bank account, or other financial account), that Defendant 10 obtained before the Effective Date in connection with the offering or sale of credit 11 repair services. However, customer information may be disclosed if requested by a 12 government agency or required by law, regulation, or court order. 13 14 III. Civil Money Penalties 11) Under § 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the 15 alleged violations of law described in the Complaint, and taking into account the 16 factors in 12 U.S.C. § 5565(c)(3), a judgment for a civil money penalty is entered 17 in favor of the Bureau and against Defendant in the amount of $150,000. 18 12) Within 10 days of the Effective Date, Defendant must pay the civil 19 money penalty by wire transfer to the Bureau or to the Bureau’s agent in 20 compliance with the Bureau’s wiring instructions. 5 1 13) The civil money penalty paid under this Order will be deposited in the 2 Civil Penalty Fund of the Bureau as required by § 1017(d) of the CFPA, 12 U.S.C. 3 § 5497(d). 4 14) Defendant must treat the civil money penalty paid under this Order as 5 a penalty paid to the government for all purposes. Regardless of how the Bureau 6 ultimately uses those funds, Defendant may not: 7 a) Claim, assert, or apply for a tax deduction, tax credit, or any 8 other tax benefit for any civil money penalty paid under this Order; or 9 b) Seek or accept, directly or indirectly, reimbursement or 10 indemnification from any source, including but not limited to payment 11 made under any insurance policy, with regard to any civil money 12 penalty paid under this Order. 13 15) To preserve the deterrent effect of the civil money penalty in any 14 Related Consumer Action, Defendant may not argue that Defendant is entitled to, 15 nor may Defendant benefit by, any offset or reduction of any compensatory 16 monetary remedies imposed in the Related Consumer Action because of the civil 17 money penalty paid in this action or because of any payment that the Bureau 18 makes from the Civil Penalty Fund (“Penalty Offset”). If the court in any Related 19 Consumer Action grants such a Penalty Offset, Defendant must, within 30 days 20 after entry of a final order granting the Penalty Offset, notify the Bureau, and pay 6 1 the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be 2 considered an additional civil money penalty and will not change the amount of the 3 civil money penalty imposed in this action. 4 5 IV. Additional Monetary Provisions 16) In the event of any default on Defendant’s obligation to make 6 payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, 7 will accrue on any outstanding amounts not paid from the date of default to the 8 date of payment, and will immediately become due and payable. 9 17) Defendant must relinquish all dominion, control, and title to the funds 10 paid or to be paid under this Order to the fullest extent permitted by law and no 11 part of the funds may be returned to Defendant. 12 18) Under 31 U.S.C. § 7701, Defendant must furnish to the Bureau its 13 taxpayer identifying number, which may be used for purposes of collecting and 14 reporting on any delinquent amount arising out of this Order. 15 19) Within 30 days of the entry of a final judgment, consent order, or 16 settlement in a Related Consumer Action, Defendant must notify the Enforcement 17 Director of the final judgment, consent order, or settlement in writing. That 18 notification must indicate the amount of redress, if any, that Defendant paid or is 19 required to pay to consumers and describe the consumers or classes of consumers 20 to whom that redress has been or will be paid. 7 1 2 V. Reporting Requirements 20) Defendant must notify the Bureau of any development that may affect 3 compliance obligations arising under this Order, including but not limited to, any 4 change in its structure, including a dissolution, assignment, sale, merger, or other 5 action that would result in the emergence of a successor company; the creation or 6 dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices 7 subject to this Order; the filing of any bankruptcy or insolvency proceeding by or 8 against Defendant; or a change in Defendant’s name or address. Defendant must 9 provide this notice, if practicable, at least 30 days before the development, but in 10 11 any case no later than 14 days after the development. 21) Within 7 days of the Effective Date, Defendant must: 12 a) Designate at least one telephone number and email, physical, 13 and postal address as points of contact, which the Bureau may use to 14 communicate with Defendant; 15 b) 16 owner, or that a Defendant directly or indirectly controls, by all of 17 their names, telephone numbers, and physical, postal, email, and 18 Internet addresses; and Identify all businesses for which any Defendant is the 19 20 8 1 c) 2 products and services offered, and the means of advertising, 3 marketing, and sales. 22) 4 Describe the activities of each such business, including the For 5 years from the Effective Date, Defendant must report any 5 change in the information required to be submitted under ¶ 20 at least 30 days 6 before the change or as soon as practicable after learning about the change, 7 whichever is sooner. 23) 8 9 10 Within 90 days of the Effective Date, and again one year after the Effective Date, Defendant must submit to the Enforcement Director an accurate written compliance progress report, which, at a minimum: 11 a) 12 has complied with this Order; and 13 b) 14 § VI, unless previously submitted to the Bureau. 15 16 17 18 19 VI. Describes in detail the manner and form in which Defendant Attaches a copy of each Order Acknowledgment obtained under Order Distribution and Acknowledgment 24) Within 30 days of the Effective Date, Defendant must deliver a copy of this Order to each of its board members and executive officers. 25) For 5 years from the Effective Date, Defendant must deliver a copy of this Order to any business entity resulting from any change in structure referred to 20 9 1 in ¶ 20, and any future board members and executive officers before they assume 2 their responsibilities. 3 26) Defendant must secure a signed and dated statement acknowledging 4 receipt of a copy of this Order, ensuring that any electronic signatures comply with 5 the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of 6 delivery, from all persons receiving a copy of this Order under this Section. 7 8 VII. Recordkeeping 27) Defendant must create or, if already created, must retain for at least 5 9 years from the Effective Date all documents and records necessary to demonstrate 10 full compliance with each provision of this Order, including all submissions to the 11 Bureau. 12 13 14 15 16 17 28) Defendant must retain the documents related to the compliance report described in ¶ 27 for at least 5 years. 29) Defendant must make the documents identified in ¶ 27 available to the Bureau upon the Bureau’s request. VIII. Notices 30) Unless otherwise directed in writing by the Bureau, Defendant must 18 provide all submissions, requests, communications, or other documents relating to 19 this Order in writing, with the subject line, “In re Prime Credit Consultants, Matter 20 No. 2013-0946-02” and send them either: 10 a) 1 By overnight courier (not the U.S. Postal Service), as follows: 2 Assistant Director for Enforcement 3 Consumer Financial Protection Bureau 4 ATTN: Office of Enforcement 5 1625 Eye St., N.W. 6 Washington, DC 20006 7 b) By first-class mail to the below address and contemporaneously 8 by email to Assistant Director for Enforcement 9 10 Consumer Financial Protection Bureau 11 ATTN: Office of Enforcement 12 1700 G Street, N.W. 13 Washington, DC 20552 14 15 IX. Cooperation with the Bureau 31) Defendant must cooperate fully to help the Bureau determine the 16 identity and location of, and the amount of injury sustained by, each Affected 17 Consumer. Defendant must provide such information in their or their agents’ 18 possession or control within 14 days of receiving a written request from the 19 Bureau. 20 11 1 X. Compliance Monitoring 32) 2 Within 30 days of receipt of a written request from the Bureau, 3 Defendant must submit compliance reports or other requested information, which 4 must be made under penalty of perjury; provide sworn testimony; or produce 5 documents. 33) 6 Defendant must permit Bureau representatives to interview any 7 employee or other person affiliated with Defendant who have agreed to such an 8 interview regarding the subject matter or compliance of this Order. The person 9 interviewed may have counsel present. 34) 10 11 12 13 14 15 Nothing in this Order will limit the Bureau’s lawful use of civil investigative demands under 12 C.F.R. § 1080.6 or other compulsory process. XI. Retention of Jurisdiction 35) The Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. 36) Notwithstanding the provisions of ¶ 35, any time limits for 16 performance fixed by this Order may be extended by mutual written agreement of 17 the parties and without further Court approval. Additionally, details related to 18 administration of §§ V through X of this Order may be modified by written 19 agreement of the parties and without further Court approval. Any other 20 12 1 modifications to this Order may be made only upon approval of the Court, upon 2 motion by any party. 3 4 XII. Administrative Provisions 37) The Bureau releases and discharges Defendant from all potential 5 liability for law violations that the Bureau has or might have asserted based on the 6 practices alleged in the Complaint, to the extent such practices occurred before the 7 Effective Date and the Bureau knows about them as of the Effective Date. The 8 Bureau may use the practices alleged in the Complaint in future enforcement 9 actions against Defendant or its affiliates to establish a pattern or practice of 10 violations or the continuation of a pattern or practice of violations or to calculate 11 the amount of any penalty. This release does not preclude or affect any right of the 12 Bureau to determine and ensure compliance with this Order, or to seek penalties 13 for any violations of this Order. 14 38) Should Defendant seek to transfer or assign all or part of its operations 15 that are subject to this Order, Defendant must, as a condition of sale, obtain the 16 written agreement of the transferee or assignee to comply with all applicable 17 provisions of this Order. 18 IT IS SO ORDERED. 19 Dated: August 31, 2017 20 ______________________________ UNITED STATES DISTRICT JUDGE 13 1 Consented and agreed to: 2 FOR THE CONSUMER FINANCIAL PROTECTION BUREAU: 3 Anthony Alexis Enforcement Director Deborah Morris Deputy Enforcement Director Carolyn Hahn Acting Assistant Litigation Deputy 4 5 6 7 8 9 10 11 12 /s/ Sarah Preis Sarah Preis (Email: (Phone: 202-435-9318) Colin Reardon (Email: (Phone: 202-435-9668) Benjamin Clark (Email: (Phone: 202-435-7871) 1700 G Street NW Washington, DC 20552 Fax: (202) 435-7722 13 14 Attorneys for Plaintiff Consumer Financial Protection Bureau 15 19 FOR DEFENDANT: _/s/ Steve Baghoomian ________ STEVE BAGHOOMIAN (Email: (Telephone: 818-281-3067) Law Office of Steve Baghoomian 1931 N. Buena Vista Street #104 Burbank, CA 91504 20 Attorney for Defendant 16 17 18 14

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