CFPB imposes $8 million penalty on a company sued by VPLC last year

Wednesday, December 9th, 2015

The Consumer Financial Protection Bureau (CFPB) took action this week against nationwide subprime credit reporting agency Clarity Services, Inc for violations of the Fair Credit Reporting Act (FCRA).  The FCRA violations were exposed by our lawsuit filed against Clarity last year.  The bulk of the work on the lawsuit was done by our co-counsel Kelly and Crandall and Consumer Litigation Associates.   The CFPB found that Clarity violated the Fair Credit Reporting Act by illegally obtaining the consumer reports of tens of thousands of consumers—without a permissible purpose—for use in marketing materials for potential clients.   This is what VPLC, Kelly and Crandall and Cons Litigation Associates sued them for over a year ago:

Our lawsuit was on behalf of people that go to Internet loan websites and enter their personal financial information.  This information is then sold and used to harass people into getting these horrible loans and to harass the borrowers when they inevitably default.  The information is also often sold to scammers who convince borrowers they must pay fake debt collectors to avoid imprisonment.  Clarity is involved in this unlawful dissemination of borrowers’ personal information.

The CFPB ordered Clarity to end illegal credit reporting practices, improve consumer safeguards, fully investigate consumer disputes, and pay a civil monetary penalty of $8 million

“Credit reporting plays a critical role in consumers’ financial lives,” said CFPB Director Richard Cordray. “Clarity and its owner mishandled important consumer information and failed to take appropriate action to investigate consumer disputes. Today, we are holding them accountable for cleaning up the way they do business.”

We settled our case against Clarity this summer and then filed another lawsuit against The Servicing Company LLC.  The Servicing Company is also illegally obtaining credit reports about internet loan borrowers and applicants with no permissible purpose.  They are then reselling these reports to numerous buyers that harass and intimidate our clients.

We want to say thank you to Kelly and Crandall and Consumer Litigation Associates for thier willingness to invest enormous resources in pursuit of justice for our beleaguered internet loan borrowers. In particular we want to thank Kristi Kelly for her incredible passion for justice for our clients.

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