Debt relief, settlement company sued by CFPB for alleged deceptive practices

DMB Financial engaged in deceptive practices by requesting and receiving fees before it performed its promised services and before consumers started payments under any debt settlement, according to a lawsuit filed Tuesday by the Consumer Financial Protection Bureau.

DMB offers to renegotiate or settle the terms of debts owed by consumers to creditors or debt collectors.  

The CFPB’s lawsuit, filed in federal court, seeks an injunction, as well as return of money to consumers, return of ill-gotten gains, and civil penalties.

The CFPB also alleges that, after settling debts, DMB collected fees based on increased debt amounts after enrollment rather than the amount of the debt at the time of enrollment.

DMB failed to disclose to consumers before enrollment when it would make a settlement offer to creditors or debt collectors, the lawsuit alleges.  

In addition, the CFPB alleges that DMB didn't disclose the amount of money or the percentage of each outstanding debt the consumer had to accumulate before DMB would make a settlement offer.  

The CFPB also alleges that DMB misrepresented to consumers that it wouldn't charge fees for its services until after it settled a debt and consumers made a payment under the settlement. It also alleges that DMB misrepresented in its contracts the debt amount that it would use to determine its fees.