Prime Credit, L.L.C., IMC Capital, L.L.C., Commercial Credit Consultants, Blake Johnson, Eric Schlegel, Park View Law, and Arthur Barens

Documents in this case

• Complaint · June 2017 · 22 p.
• Complaint · June 2017 · 21 p.
• Stipulation · July 2017 · 14 p.
• Stipulation · July 2017 · 12 p.

Case summary

The Consumer Financial Protection Bureau (CFPB) took action against four California-based credit repair companies and three individuals for misleading consumers and charging illegal fees. In two complaints filed in federal court, the Bureau alleged that the companies not only charged illegal advance fees for credit repair services, but also misrepresented their ability to repair consumers’ credit scores. Under the terms of the first final judgment, Prime Credit, L.L.C., IMC Capital, L.L.C., Commercial Credit Consultants, Blake Johnson, and Eric Schlegel have been ordered to pay a civil money penalty of more than $1.5 million. Under the terms of the second final judgment, Park View Law, known formerly as Prime Law Experts, Inc., and its owner Arthur Barens have been ordered to pay $500,000 in relinquished funds to the U.S. Treasury.

Complaint (June 2017)

PDF of this document (22 pages)

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SARAH PREIS, DC BAR # 997387 (PHV pending) (Email: [email protected]) COLIN REARDON, NY Bar # 4945655 (PHV pending) (Email: [email protected]) BENJAMIN CLARK, IL BAR # 6316861 (PHV pending) (Email: [email protected]) Consumer Financial Protection Bureau 1700 G Street NW Washington, DC 20552 Phone: (202) 435-9318, -9668, -7871 Fax: (202) 435-7329 Attorneys for Plaintiff Consumer Financial Protection Bureau UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Consumer Financial Protection Bureau, Plaintiff, v.

Park View Law, Inc. (f.k.a. Prime Law Experts, Inc.), and Arthur Barens, Defendants.

Case No. 2:17-cv-4721 COMPLAINT FOR PERMANENT INJUNCTION AND OTHER RELIEF Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 1 of 22 Page ID #:1

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INTRODUCTION 1.

Plaintiff, the Consumer Financial Protection Bureau (“Bureau”), brings this action against Park View Law, Inc. (a.k.a. Park View Legal, a.k.a. Prime Law Experts, Inc.) and Arthur Barens under Sections 1031(a), 1036(a), and 1054(a) of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5531(a), 5536(a), and 5564(a), and the Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108, and its implementing regulation, the Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, to obtain permanent injunctive relief, civil money penalties, and other appropriate relief in connection with Defendants’ offer and sale of credit repair services to consumers.

JURISDICTION AND VENUE 2.

This Court has subject-matter jurisdiction over this action because it is “brought under Federal consumer financial law,” 12 U.S.C. § 5565(a)(1), presents a federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 U.S.C. § 1345.

3.

Venue is proper in this District under 28 U.S.C. § 1391(b)(2), because a substantial part of the events or omissions giving rise to the claims herein occurred in this District, and under 12 U.S.C. § 5564(f), because Defendants did business in this District.

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PARTIES 4.

The Bureau is an independent agency of the United States. 12 U.S.C. § 5491. The Bureau is charged with enforcing Federal consumer financial laws. 12 U.S.C. §§ 5563, 5564. The Bureau has independent litigating authority, 12 U.S.C. § 5564(a)-(b), including the authority to enforce the TSR as it applies to persons subject to the CFPA, 15 U.S.C. § 6105(d). 5.

Defendant Park View Law, Inc. (f.k.a. Prime Law Experts, Inc.) (“PVL”) was a registered California corporation with a place of business in Los Angeles, California.

6.

PVL offered or provided credit repair, which is a consumer financial product or service covered by the CFPA, 12 U.S.C. § 5481(15)(A)(viii),(ix), and therefore is a covered person within the meaning of the CFPA, id. § 5481(6). 7.

PVL is a seller, as defined by the TSR, 16 C.F.R. § 310.2(dd), because, in connection with a telemarketing transaction, it arranged for others to provide goods or services to customers in exchange for consideration. 8.

Defendant Arthur Barens (“Barens”) is a California resident. 9.

Barens incorporated Prime Law Experts in December 2012, and amended the name to Park View Law in 2013. Barens registered PVL as a credit repair company with the state of California, and served as PVL’s sole owner, officer, and employee.

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10.

From at least March 2013 until as late as June 29, 2015, Barens—as the sole owner and employee of PVL—engaged in the acts and practices of PVL set forth in this Complaint.

11.

Because of his status as a director, officer, or employee charged with managerial responsibility for PVL, and because of his status as the controlling shareholder of PVL who materially participated in its affairs, Barens was a “related person” deemed to be a “covered person” under the CFPA with respect to PVL. 12 U.S.C. §§ 5481(25)(B), (C)(i), (ii).

12.

Barens was a “seller” within the meaning of the TSR because, in connection with a telemarketing transaction, he arranged for others to provide services to customers in exchange for consideration. 16 C.F.R. § 310.2(dd). DEFENDANTS PROVIDED CREDIT REPAIR SERVICES THROUGH PARTNERSHIPS WITH PRIME AND PMH 13.

Defendants provided credit repair services to consumers through partnerships with two other companies: Prime Credit, L.L.C. (a.k.a. Prime Marketing, L.L.C.; d.b.a. Prime Credit Consultants) (“Prime”) and Prime Marketing Holdings, L.L.C. (“PMH”).

14.

In March 2013, Defendants entered into an agreement with Prime, which enabled Prime to offer, sell, and provide credit repair services using PVL’s name.

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15.

Defendants authorized Prime to provide credit repair services to consumers under PVL’s name and to execute contracts with consumers on PVL’s behalf.

16.

Defendants also authorized Prime to market credit repair services to consumers under PVL’s name.

17.

Barens, who served as PVL’s sole owner and employee, was aware of the contents of the telemarketing scripts that Prime’s telemarketers used in sales calls with consumers.

18.

As the sole owner and employee of PVL, Barens was responsible for Prime’s telemarketing, including representations contained in those scripts while marketing credit repair services to consumers under PVL’s name. 19.

Barens was aware of and authorized the types of fees that customers were charged for credit repair services and the timing of those fees. 20.

At times, Barens responded to consumer complaints about the credit repair services PVL and Prime offered.

21.

Defendants continued working with Prime until Prime sold its assets to PMH on September 30, 2014.

22.

From October 1, 2014 until as late as June 29, 2015, Defendants worked with PMH to offer and provide credit repair services pursuant to an agreement that operated similarly to PVL’s agreement with Prime. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 5 of 22 Page ID #:5

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23.

Pursuant to that agreement, Defendants authorized PMH to market and provide credit repair services under PVL’s name, authorized PMH to execute contracts with consumers on PVL’s behalf, and responded to certain consumer complaints about their agreements with PVL. 24.

Barens was aware of the contents of the telemarketing scripts that PMH’s telemarketers used in sales calls with consumers. 25.

Defendants were responsible for representations contained in scripts that PMH’s telemarketers used while marketing credit repair services to consumers under PVL’s name.

26.

Defendants caused harm to consumers who paid fees for credit repair services offered under PVL’s name.

DEFENDANTS PARTICIPATED IN THE CHARGING OF UNLAWFUL ADVANCE FEES 27.

Through partnerships with Prime and PMH, Defendants participated in the charging of unlawful advance fees. 28.

Defendants authorized Prime and PMH to market credit repair services under PVL’s name to consumers nationwide through telemarketing. 29.

Consumers who contracted with PVL through Prime and PMH included individuals who were seeking to obtain a mortgage, loan, refinancing or other extension of credit.

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30.

Defendants authorized Prime and PMH to request and receive payments for credit repair services under PVL’s name. 31.

Consumers were typically charged three types of fees in the first six months of service: (1) an initial consultation fee; (2) a one-time set-up fee; and (3) monthly fees.

32.

During sales calls with these consumers, telemarketers represented that a consultation regarding the consumer’s credit report was the first step in the credit repair process.

33.

Consumers paid an initial fee that was typically $59.95 for the consultation and for a copy of their credit report. 34.

If the consumer agreed to receive services beyond the consultation, the consumer’s contract with PVL required that the consumer pay a set-up fee that was typically hundreds of dollars.

35.

Beginning in the third month of service, consumers were charged monthly fees, which were typically $89.99 per month. 36.

During the service period, Prime or PMH mailed dispute letters to the credit reporting agencies, challenging much of the negative information in the consumers’ reports, even if that information was accurate and not obsolete. 37.

Consumers continued to receive charges for monthly fees until they affirmatively cancelled their contracts.

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38.

Defendants, Prime, and PMH typically did not obtain credit reports or credit scores while customers received services or after consumers completed services to determine whether negative items had been removed from consumers’ credit reports or whether consumers’ credit scores had increased. 39.

Barens, PVL’s sole owner and employee, was aware of and authorized Prime’s and PMH’s practices concerning the fees charged in PVL’s name. DEFENDANTS PARTICIPATED IN MAKING MISREPRESENTATIONS REGARDING THE EFFICACY OF CREDIT REPAIR SERVICES 40.

Defendants participated in the making of misrepresentations to consumers regarding the efficacy of the credit repair services offered and provided in PVL’s name.

Removal of Negative Items 41.

With Defendants’ participation and authorization, Prime and PMH misrepresented their ability to remove negative items from consumers’ credit reports on PVL’s behalf by failing to make clear the limited circumstances in which they could do so.

42.

Pursuant to the Fair Credit Reporting Act, a consumer reporting agency typically may not report negative items that are more than seven years old, or bankruptcies that are more than ten years old. 15 U.S.C. § 1681c. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 8 of 22 Page ID #:8

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43.

A consumer reporting agency may continue reporting a disputed item unless after an investigation the disputed item is found to be inaccurate, incomplete, or cannot be verified. 15 U.S.C. § 1681i(a)(5)(A). 44.

Following a reinvestigation, consumer reporting agencies only have to remove inaccurate, incomplete, or unverifiable information from consumers’ credit reports. 15 U.S.C. § 1681i(a)(1)(A), (5)(A).

45.

In numerous instances, Prime’s and PMH’s marketing created the net impression that credit repair services provided in PVL’s name would or likely would result in the removal of material negative entries on consumers’ credit reports, regardless of whether the negative entries were inaccurate or obsolete. 46.

Barens was aware of the representations made by Prime’s and PMH’s telemarketers to consumers when offering credit repair services under PVL’s name.

47.

Defendants were responsible for the representations made by Prime and PMH when offering credit repair services to consumers under PVL’s name. 48.

Defendants, Prime, and PMH lacked a reasonable basis for representing that their credit repair services could remove negative items when they did not have information indicating that such items were inaccurate or obsolete.

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49.

Because Defendants, Prime, and PMH typically did not track whether negative items were removed from consumers’ credit reports, they lacked a reasonable basis for representing without qualification that their services would or likely would result in the removal of negative items. Ability to Improve Consumers’ Credit Scores 50.

With Defendants’ participation and authorization, Prime and PMH misrepresented, explicitly and implicitly, PVL’s and their ability to increase consumers’ credit scores.

51.

Defendants authorized Prime and PMH to use telemarketers to market credit repair services under PVL’s name.

52.

In numerous instances, those telemarketers represented during sales calls that credit repair services offered in PVL’s name substantially raised customers’ credit scores, often stating that their customers’ scores increased by an average of 100 or more points.

53.

Barens was aware of the representations made by Prime’s and PMH’s telemarketers to consumers when offering credit repair services under PVL’s name.

54.

Defendants were responsible for representations made by Prime and PMH when offering credit repair services to consumers under PVL’s name. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 10 of 22 Page ID #:10

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55.

Defendants, Prime, and PMH lacked a reasonable basis for representing that their credit repair services substantially raised its customers’ credit scores.

56.

Defendants, Prime, and PMH typically did not obtain or review consumers’ credit scores to determine whether their credit scores increased after using credit repair services.

57.

Because Defendants, Prime, and PMH did not actually measure the average credit score increase obtained by consumers who used their services, they lacked a reasonable basis for stating that their services increased credit scores by an average of 100 or more points.

58.

The representations that Defendants, Prime, and PMH’s services increased credit scores by an average of over 100 or more points were also false. DEFENDANTS PARTICIPATED IN MISREPRESENTATIONS REGARDING THE TERMS OF THE “GUARANTEE” IN ITS CONTRACT 59.

Defendants also participated in the making of misrepresentations regarding the terms of a money-back guarantee for the credit repair services they offered in partnership with Prime and PMH. 60.

Defendants authorized marketing that created the impression that if a consumer was not satisfied with PVL’s credit repair services, the consumer could obtain a refund.

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61.

But PVL’s sales contracts typically limited the guarantee to the removal of a minimum of one disputed item within 180 days of the execution of the sales contract.

62.

Defendants, Prime, and PMH construed the guarantee as meaning that so long as their credit repair services resulted in the removal of a single disputed item within six months, consumers could not obtain a refund, even if their credit scores did not improve.

63.

Defendants, Prime, and PMH also typically required customers to pay for a full six months of services to be eligible for the guarantee. 64.

The limitations of PVL’s refund policy were not clearly and conspicuously disclosed during sales calls and in PVL’s online marketing. 65.

Barens was aware of complaints from customers who considered the marketing of its guarantee to be deceptive. DEFENDANTS PARTICIPATED IN MISREPRESENTATIONS REGARDING THE COST OF CREDIT REPAIR SERVICES 66.

In addition to an initial consultation fee and a one-time set-up fee, PVL’s contract required customers enrolled in credit repair services to pay monthly fees.

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67.

In numerous instances, Prime’s and PMH’s telemarketers failed to disclose to consumers during sales calls that they would be charged the monthly fee under PVL’s contract.

68.

Defendants were aware of and responsible for the misrepresentations made by Prime and PMH when offering credit repair services to consumers under PVL’s name.

COUNT I Advance Fees in Violation of the TSR (PVL and Barens) 69.

The allegations in paragraphs 1-68 are incorporated by reference. 70.

It is an abusive act or practice under the TSR for a seller to request or collect fees for credit repair services until the seller has provided the person with documentation in the form of a consumer report from a consumer reporting agency demonstrating that the promised results have been achieved, such report having been issued more than six months after the results were achieved. 71.

Because Defendants were each sellers, they violated the TSR by requesting and collecting fees for credit repair services before providing consumers with documentation in the form of a consumer report from a consumer reporting agency demonstrating that the promised results have been achieved, such report Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 13 of 22 Page ID #:13

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having been issued more than six months after the results were achieved. 16 C.F.R. § 310.4(a)(2).

COUNT II Misrepresentations about Material Aspects of the Efficacy of Services in Violation of the TSR (PVL and Barens) 72.

The allegations in paragraphs 1-68 are incorporated by reference. 73.

It is a deceptive act or practice under the TSR for sellers to misrepresent any material aspect of the efficacy of their services. 16 C.F.R. § 310.3(a)(2)(iii).

74.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or by implication, that credit repair services offered under the PVL name would or likely would result in the removal of material negative entries on consumers’ credit reports regardless of whether the negative entries were inaccurate or obsolete. 75.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or by implication that credit repair services offered under the PVL name would or likely would result in a substantial increase to consumers’ credit scores. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 14 of 22 Page ID #:14

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76.

These representations have been material and likely to mislead consumers acting reasonably under the circumstances. 77.

Because Defendants lacked a reasonable basis for these representations, the representations were deceptive. 78.

Defendants’ representations were false.

79.

Because Defendants were each sellers, Defendants’ material misrepresentations about the efficacy of credit repair services offered under the PVL name violated the TSR. 16 C.F.R. § 310.3(a)(2)(iii). COUNT III Failure to Disclose Limitations on Guarantee in Violation of the TSR (PVL and Barens) 80.

The allegations in paragraphs 1-68 are incorporated by reference. 81.

It is a deceptive act or practice under the TSR for a seller to fail to clearly and conspicuously disclose material terms and conditions in an advertised refund policy before a consumer consents to pay. 16 C.F.R. § 310.3(a)(1)(iii). 82.

Defendants represented that credit repair services offered under the PVL name came with a money-back guarantee. 83.

Defendants failed to clearly and conspicuously disclose the limitations that PVL’s contracts place on this guarantee before consumers consented to pay. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 15 of 22 Page ID #:15

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84.

Defendants misrepresented, directly or indirectly, expressly or by implication, the terms of this guarantee.

85.

Because Defendants were each sellers, their failure to clearly and conspicuously disclose the material terms and conditions of PVL’s refund policy before a consumer consented to pay for goods or services violated the TSR. 16 C.F.R. § 310.3(a)(1)(iii).

COUNT IV Misrepresentations Regarding the Cost of Services in Violation of the TSR (PVL and Barens) 86.

The allegations in paragraphs 1-68 are incorporated by reference. 87.

It is a deceptive act or practice under the TSR for a seller to misrepresent, directly or by implication, the total cost to purchase the goods and services that are the subject of the sales offer. 16 C.F.R. § 310.3(a)(2)(i). 88.

Defendants have misrepresented the total cost of credit repair services offered under the PVL name.

89.

These representations have been material and likely to mislead consumers acting reasonably under the circumstances. 90.

Because Defendants were each sellers, their misrepresentations about the total cost of the credit repair services violate the TSR. 16 C.F.R. § 310.3(a)(2)(i).

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COUNT V Deceptive Acts or Practices in Violation of the CFPA (PVL and Barens) 91.

The allegations in paragraphs 1-68 are incorporated by reference. 92.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or by implication, that credit repair services offered under the PVL name will or likely will result in the removal of material negative entries on consumers’ credit reports regardless of whether the negative entries were inaccurate or obsolete. 93.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or by implication that credit repair services offered under the PVL name will or likely will result in a substantial increase to consumers’ credit scores. 94.

These representations have been material and likely to mislead consumers acting reasonably under the circumstances. 95.

Because Defendants lacked a reasonable basis for these representations, the representations were deceptive. 96.

Defendants’ representations regarding the ability of credit repair services offered under the PVL name to remove negative entries on consumers’ credit reports and improve consumers’ credit scores were false. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 17 of 22 Page ID #:17

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97.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants, directly or indirectly, expressly or by implication, made material misrepresentations regarding the terms of PVL’s guarantee.

98.

Defendants’ marketing has created the net impression that consumers could obtain a full refund if they were not satisfied with the credit repair services offered under the PVL name.

99.

However, Defendants’ guarantee policy was limited to the removal of one “disputed” item with 180 days, and only applied if consumers agreed to pay for six months of services.

100. In numerous instances, in connection with the offering or provision of credit repair services, Defendants, directly or indirectly, expressly or by implication, made material misrepresentations regarding the costs of credit repair services offered under the PVL name.

101. These representations regarding the efficacy of credit repair services offered under the PVL name, the terms of PVL’s guarantee, and the cost of credit repair services offered under the PVL name have been material and likely to mislead consumers acting reasonably under the circumstances. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 18 of 22 Page ID #:18

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102. Therefore, Defendants’ representations as described herein have constituted deceptive acts or practices in violation of Sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531, 5536.

COUNT VI Assisting and Facilitating Deceptive and Abusive Practices in Violation of the TSR (PVL and Barens) 103. The allegations in paragraphs 1-68 are incorporated by reference. 104. It is a deceptive telemarketing act or practice and a violation of the TSR to provide substantial assistance or support to any seller or telemarketer when that person knows or consciously avoids knowing that the seller or telemarketer has engaged in any act or practice that violates § 310.3(a), (c), or (d), or § 310.4 of the TSR.

105. Barens and PVL provided substantial assistance and support to Prime and PMH while knowing or consciously avoiding knowing that Prime and PMH were violating § 310.3(a) and § 310.4 of the TSR. 106. Barens and PVL’s actions therefore constituted deceptive practices in violation of § 310.3(b) of the TSR.

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COUNT VII Substantial Assistance in Violation of the CFPA (Barens) 107. The allegations in paragraphs 1-68 are incorporated by reference. 108. Prime and PMH are covered persons that committed deceptive acts and practices in violation of the CFPA, 12 U.S.C. § 5536(a)(1). 109. Barens knowingly and recklessly provided substantial assistance to Prime and PMH.

110. Therefore, Barens provided substantial assistance to Prime and PMH in violation of the CFPA, 12 U.S.C. § 5536(a)(3). THIS COURT’S POWER TO GRANT RELIEF 111. The CFPA empowers this Court to grant any appropriate legal or equitable relief including, without limitation, a permanent or temporary injunction, rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement or compensation for unjust enrichment, and monetary relief, including but not limited to civil money penalties, to prevent and remedy any violation of any provision of law enforced by the Bureau. 12 U.S.C. §§ 5538(a); 5565(a), (c).

PRAYER FOR RELIEF The Bureau requests that the Court, as permitted by 12 U.S.C. § 5565: Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 20 of 22 Page ID #:20

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a.

Permanently enjoin Defendants from committing further violations of the CFPA and the TSR and other provisions of Federal consumer financial law as defined by 12 U.S.C. § 5481(14);

b.

Grant additional injunctive relief as the Court may deem to be just and proper;

c.

Award damages and other monetary relief against Defendants as the Court finds necessary to redress injury to consumers resulting from Defendants’ violations of the CFPA and the TSR, including but not limited to rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement or compensation for unjust enrichment;

d.

Award Plaintiff civil money penalties; and e.

Award Plaintiff the costs of bringing this action, as well as such other and additional relief as the Court may determine to be just and proper. Case 2:17-cv-04721 Document 1 Filed 06/27/17 Page 21 of 22 Page ID #:21

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Dated: June 27, 2017

Respectfully submitted,

Anthony Alexis Enforcement Director

Deborah Morris Deputy Enforcement Director

Craig Cowie Assistant Litigation Deputy

/s/ Sarah Preis

Sarah Preis (Email: [email protected]) Colin Reardon (Email: [email protected]) Benjamin Clark (Email: [email protected]) 1700 G Street NW Washington, DC 20552 Phone: (202) 435-9318, -9668, -7871 Fax: (202) 435-7722

Attorneys for Plaintiff Consumer Financial Protection Bureau

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Complaint (June 2017)

PDF of this document (21 pages)

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SARAH PREIS, DC BAR # 997387 (PHV pending) (Email: [email protected]) COLIN REARDON, NY Bar # 4945655 (PHV pending) (Email: [email protected]) BENJAMIN CLARK, IL BAR # 6316861 (PHV pending) (Email: [email protected]) Consumer Financial Protection Bureau 1700 G Street NW Washington, DC 20552 Phone: (202) 435-9318, -9668, -7871 Fax: (202) 435-7329 Attorneys for Plaintiff Consumer Financial Protection Bureau UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Consumer Financial Protection Bureau, Plaintiff, v.

Commercial Credit Consultants (d.b.a. Accurise); IMC Capital L.L.C. (a.k.a. Imperial Meridian Capital L.L.C., Imperial Capital, and IMCA Capital L.L.C); Prime Credit, L.L.C. (a.k.a. Prime Marketing, L.L.C.; d.b.a. Prime Credit Consultants); Blake Johnson; and Eric Schlegel, Defendants.

Case No. 2:17-cv-4720 COMPLAINT FOR PERMANENT INJUNCTION AND OTHER RELIEF Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 1 of 21 Page ID #:1

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INTRODUCTION 1.

Plaintiff, the Consumer Financial Protection Bureau (“Bureau”), brings this action against Commercial Credit Consultants (d.b.a. Accurise); IMC Capital L.L.C. (a.k.a. Imperial Meridian Capital L.L.C., Imperial Capital, and IMCA Capital L.L.C); Prime Credit, L.L.C. (a.k.a. Prime Marketing, L.L.C.; d.b.a. Prime Credit Consultants); Blake Johnson; and Eric Schlegel (collectively, “Defendants”) under Sections 1031(a), 1036(a), and 1054(a) of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5531(a), 5536(a), and 5564(a), and the Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108, and its implementing regulation, the Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, to obtain permanent injunctive relief, civil money penalties, and other appropriate relief in connection with Defendants’ offer and sale of credit repair services to consumers. JURISDICTION AND VENUE 2.

This Court has subject-matter jurisdiction over this action because it is “brought under Federal consumer financial law,” 12 U.S.C. § 5565(a)(1), presents a federal question, 28 U.S.C. § 1331, and is brought by an agency of the United States, 28 U.S.C. § 1345.

3.

Venue is proper in this District under 28 U.S.C. § 1391(b)(1) because all Defendants reside in this District, under 28 U.S.C. § 1391(b)(2), because a Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 2 of 21 Page ID #:2

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substantial part of the events or omissions giving rise to the claims herein occurred in this District, and under 12 U.S.C. § 5564(f), because Defendants are located in and do business in this District.

PLAINTIFF 4.

The Bureau is an independent agency of the United States. 12 U.S.C. § 5491. The Bureau is charged with enforcing Federal consumer financial laws. 12 U.S.C. §§ 5563, 5564. The Bureau has independent litigating authority, 12 U.S.C. § 5564(a)-(b), including the authority to enforce the TSR as it applies to persons subject to the CFPA, 15 U.S.C. § 6105(d).

DEFENDANTS Corporate Defendants 5.

Commercial Credit Consultants (d.b.a. Accurise) (“CCC”) is a Wyoming corporation with a principal place of business in Los Angeles, California.

6.

From August 1, 2009, until the summer of 2012, CCC offered or provided credit repair services to consumers. 7.

IMC Capital L.L.C. (a.k.a. Imperial Meridian Capital L.L.C., Imperial Capital, and IMCA Capital L.L.C) (“IMC”) is a California corporation with a principal place of business in Los Angeles, California. Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 3 of 21 Page ID #:3

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8.

IMC offered or provided credit repair services to consumers from approximately January 2012 until the summer of 2012. 9.

Prime Credit, L.L.C. (a.k.a. Prime Marketing, L.L.C.; d.b.a. Prime Credit Consultants) (“Prime”) is a California corporation with a principal place of business in Los Angeles, California.

10.

From approximately July 2012 until September 30, 2014, Prime offered or provided credit repair services to consumers. 11.

In March 2013, Prime entered into an agreement with Park View Law, Inc. (a.k.a Park View Legal, a.k.a. Prime Law Experts, Inc.) (“PVL”), a California corporation that offered or provided credit repair services to consumers. 12.

Pursuant to the agreement between PVL and Prime, Prime handled marketing and performed credit repair services for consumers who entered into agreements with PVL.

13.

This agreement enabled Prime to offer credit repair services using PVL’s name.

14.

CCC and Prime’s assets were sold to a third party on October 1, 2014. 15.

CCC, IMC, and Prime each offered or provided credit repair, which is a consumer financial product or service covered by the CFPA, 12 U.S.C. § 5481(15)(A)(viii),(ix), and therefore are covered persons within the meaning of the CFPA, id. § 5481(6).

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16.

CCC, IMC, and Prime were each a seller, as defined by the TSR, 16 C.F.R. § 310.2(dd), because, in connection with a telemarketing transaction, they provided, offered to provide, or arranged for others to provide goods or services to customers in exchange for consideration. 17.

CCC, IMC, and Prime were each a telemarketer, as defined by the TSR, 16 C.F.R. § 310.2(ff), because, in connection with telemarketing, they initiated or received telephone calls to or from customers. 18.

Between August 1, 2009 and September 30, 2014, Corporate Defendants charged approximately 71,000 consumers at least $31,000,000 in fees. 19.

Corporate Defendants returned a portion of these fees to consumers through either refunds or chargebacks, including at least $850,000 between January 2012 and September 2014.

Individual Defendants 20.

Blake Johnson (“Johnson”) is a resident of Los Angeles, California. 21.

Johnson formed CCC in 2009, and was its majority owner. 22.

Johnson is the founder and chairman of IMC, and owns a majority interest in IMC.

23.

Johnson formed Prime in July 2012, and was its majority owner. 24.

Johnson engaged in the acts and practices of CCC, IMC, and Prime set forth in this Complaint.

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25.

Because of his status as a director, officer, or employee charged with managerial responsibility for CCC, IMC, and Prime, and because of his status as the controlling shareholder of CCC, IMC, and Prime who materially participated in the conduct of those entities’ affairs, Johnson was a “related person” deemed to be a “covered person” under the CFPA with respect to each of those entities. 12 U.S.C. § 5481(25)(B), (C)(i), (ii).

26.

Eric Schlegel (“Schlegel”) is a resident of Laguna Niguel, California. 27.

Schlegel was the president of CCC and also a minority shareholder in CCC.

28.

Schlegel was the president of Prime and is a minority shareholder in Prime.

29.

Schlegel engaged in the acts and practices of CCC and Prime set forth in this Complaint.

30.

Because of his status as director, officer, or employee charged with managerial responsibility for CCC and Prime, and because of his status as a shareholder of CCC and Prime who materially participated in the conduct of those entities’ affairs, Schlegel is a “related person” deemed to be a “covered person” under the CFPA with respect to each of those entities. 12 U.S.C. §§ 5481(25)(B), (C)(i), (ii).

Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 6 of 21 Page ID #:6

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31.

Johnson and Schlegel were each “sellers” within the meaning of the TSR because, in connection with a telemarketing transaction, they each provided, offered to provide, or arranged for others to provide services to customers in exchange for consideration. 16 C.F.R. § 310.2(dd). DEFENDANTS CHARGED UNLAWFUL ADVANCE FEES 32.

Defendants marketed credit repair services to consumers nationwide through telemarketing.

33.

Corporate Defendants’ customers included individuals who were seeking to obtain a mortgage, loan, refinancing or other extension of credit when they first communicated with Defendants.

34.

Corporate Defendants requested and received payment for credit repair services represented to remove derogatory information from, or to improve, consumers’ credit histories, credit records, or credit ratings. 35.

Corporate Defendants typically charged consumers three types of fees in the first six months of service: (1) an initial consultation fee; (2) a one-time setup fee; and (3) monthly fees.

36.

During sales calls with consumers, Corporate Defendants represented that a consultation regarding the consumer’s credit report was the first step in the credit repair process.

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37.

Corporate Defendants charged an initial fee that was typically $59.95 for the consultation and for a copy of the consumer’s credit report. 38.

During the consultation, an analyst purportedly reviewed and discussed the credit report with the consumer and identified how Corporate Defendants could help the consumer increase his or her credit score. 39.

If the consumer agreed to receive services beyond the consultation, Corporate Defendants charged the consumer a one-time set-up fee that was typically hundreds of dollars.

40.

Consumers sometimes paid the set-up fee in in multiple payments over the first two months of service.

41.

Beginning in the third month of service, Corporate Defendants charged monthly fees, which were typically $89.99 per month. 42.

During the service period, Corporate Defendants mailed dispute letters to the credit reporting agencies, challenging much of the negative information in the consumers’ reports, even if that information was accurate and not obsolete.

43.

Corporate Defendants continued to charge monthly fees until consumers affirmatively cancelled their contracts. 44.

Corporate Defendants typically did not obtain credit reports or credit scores while customers received services or after consumers completed services to Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 8 of 21 Page ID #:8

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determine whether negative items had been removed from consumers’ credit reports or whether consumers’ credit scores had increased. 45.

Johnson and Schlegel developed the fee structure and contracts that CCC and Prime used, and had final decision-making authority over the fees those entities charged.

46.

Johnson also developed the fee structure and contracts that IMC used, and had final decision-making authority over the fees that it charged. DEFENDANTS MISREPRESENTED THE EFFICACY OF THEIR SERVICES 47.

Defendants have misrepresented the efficacy of their services, including their ability to remove negative items and to increase consumers’ credit scores.

Removal of Negative Items 48.

Defendants misrepresented their ability to remove negative items from consumers’ credit reports by failing to make clear the limited circumstances in which they could do so.

49.

Pursuant to the FCRA, a consumer reporting agency typically may not report negative items that are more than seven years old, or bankruptcies that are more than ten years old. 15 U.S.C. § 1681c. Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 9 of 21 Page ID #:9

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50.

A consumer reporting agency may continue reporting a disputed item unless after an investigation the disputed item is found to be inaccurate, incomplete, or cannot be verified. 15 U.S.C. § 1681i(a)(5)(A). 51.

Following a reinvestigation, consumer reporting agencies only have to remove inaccurate, incomplete, or unverifiable information from consumers’ credit reports. 15 U.S.C. § 1681i(a)(1)(A),(5)(A). 52.

In numerous instances, Defendants’ marketing created the net impression that their credit repair services would or likely would result in the removal of material negative entries on consumers’ credit reports, regardless of whether the negative entries were inaccurate or obsolete. 53.

Defendants did not make clear in sales calls or in online marketing that consumer reporting agencies only have to remove negative items from consumers’ credit reports in limited circumstances. 54.

Defendants lacked a reasonable basis for representing that they could remove negative items when they did not have information indicating that such items were inaccurate or obsolete.

55.

Because Defendants typically did not track whether negative items were removed from consumers’ credit reports, they lacked a reasonable basis for representing without qualification that their services would or likely would result in the removal of negative items.

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Ability to Improve Consumers’ Credit Scores 56.

Defendants misrepresented, explicitly and implicitly, their ability to increase consumers’ credit scores.

57.

In numerous instances, Corporate Defendants represented during sales calls that Defendants’ credit repair services substantially raised their customers’ credit scores, often stating that their customers’ scores increased by an average of 100 or more points.

58.

Defendants lacked a reasonable basis for representing that their credit repair services substantially raised their customers’ credit scores. 59.

Corporate Defendants typically did not obtain or review consumers’ credit scores to determine whether their credit scores increased after using Defendants’ credit repair services.

60.

Because Defendants did not actually measure the average credit score increase obtained by consumers who used their services, Corporate Defendants lacked a reasonable basis for their statement that they increased credit scores by an average of 100 or more points.

61.

Corporate Defendants’ representations that their services increased credit scores by an average of over 100 or more points were also false. 62.

CCC and Prime’s websites have also included alleged testimonials or descriptions of individual results. Such testimonials or descriptions state that the Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 11 of 21 Page ID #:11

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consumer’s scores increased significantly or that certain negative items were removed as a result of Defendants’ services. 63.

Those testimonials implied that the results were typical of what consumers would generally achieve when using Defendants’ services. 64.

CCC and Prime lacked a reasonable basis for representing that those testimonials reflected what consumers would generally achieve when using Defendants’ services.

DEFENDANTS MISREPRESENTED AND FAILED TO CLEARLY AND CONSPICUOUSLY DISCLOSE THE TERMS OF THEIR “GUARANTEE” 65.

Defendants represented that they offered a money-back guarantee. 66.

Corporate Defendants’ marketing created the impression that if a consumer was not satisfied with their credit repair services, then the consumer could obtain a refund.

67.

But Corporate Defendants’ sales contracts typically limited the guarantee to the removal of a minimum of one disputed item within 180 days of the execution of the sales contract.

68.

Defendants construed the guarantee as meaning that so long as Defendants’ credit repair services resulted in the removal of a single disputed item within six months, consumers could not obtain a refund, even if their credit scores did not improve.

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69.

Corporate Defendants also typically required customers to pay for a full six months of services to be eligible for the guarantee. 70.

Corporate Defendants did not clearly and conspicuously disclose the limitations of their refund policy during sales calls or in their online marketing. 71.

Corporate Defendants typically did not provide consumers with a copy of the sales contract until after the consumer had provided payment information for the initial consultation fee. 72.

Johnson and Schlegel were aware of complaints from customers who considered Corporate Defendants’ marketing of the guarantee to be deceptive. DEFENDANTS MISREPRESENTED THE COST OF THEIR SERVICES 73.

In addition to an initial consultation fee and a one-time set-up fee, Defendants charged customers who enrolled in credit repair services monthly fees. 74.

In numerous instances, Corporate Defendants failed to disclose to consumers during sales calls that they would be charged a monthly fee. COUNT I Advance Fees in Violation of the TSR (All Defendants) 75.

The allegations in paragraphs 1-74 are incorporated by reference. 76.

It is an abusive act or practice under the TSR for a seller or telemarketer to request or collect fees for credit repair services until the seller has Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 13 of 21 Page ID #:13

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provided the person with documentation in the form of a consumer report from a consumer reporting agency demonstrating that the promised results have been achieved, such report having been issued more than six months after the results were achieved.

77.

Because Defendants were each telemarketers, sellers, or both, Defendants violated the TSR by requesting and collecting fees for credit repair services before providing consumers with documentation in the form of a consumer report from a consumer reporting agency demonstrating that the promised results have been achieved, such report having been issued more than six months after the results were achieved. 16 C.F.R. § 310.4(a)(2). COUNT II Misrepresentations about Material Aspects of the Efficacy of Their Services in Violation of the TSR (All Defendants) 78.

The allegations in paragraphs 1-74 are incorporated by reference. 79.

It is a deceptive act or practice under the TSR for a seller or telemarketer to misrepresent any material aspect of the efficacy of their services. 16 C.F.R. § 310.3(a)(2)(iii).

80.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 14 of 21 Page ID #:14

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by implication, that their actions will or likely will result in the removal of material negative entries on consumers’ credit reports regardless of whether the negative entries were inaccurate or obsolete.

81.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or by implication that their actions will or likely will result in a substantial increase to consumers’ credit scores.

82.

These representations have been material and likely to mislead consumers acting reasonably under the circumstances. 83.

Because Defendants lacked a reasonable basis for these representations, the representations were deceptive. 84.

Defendants’ representations were false.

85.

Because Defendants were each telemarketers, sellers, or both, Defendants’ material misrepresentations about the efficacy of their services violated the TSR. 16 C.F.R. § 310.3(a)(2)(iii). COUNT III Failure to Disclose Limitations on Guarantee in Violation of the TSR (All Defendants) 86.

The allegations in paragraphs 1-74 are incorporated by reference. Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 15 of 21 Page ID #:15

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87.

It is a deceptive act or practice under the TSR for a seller or telemarketer to fail to clearly and conspicuously disclose material terms and conditions in an advertised refund policy before a consumer consents to pay. 16 C.F.R. § 310.3(a)(1)(iii).

88.

Defendants represented that their services came with a money-back guarantee.

89.

Defendants failed to clearly and conspicuously disclose the limitations that their contracts place on this guarantee before consumers consented to pay. 90.

Defendants misrepresented, directly or indirectly, expressly or by implication, the terms of this guarantee.

91.

Because Defendants were each telemarketers, sellers, or both, Defendants’ failure to clearly and conspicuously disclose the material terms and conditions of their refund policy before a consumer consented to pay for goods or services violated the TSR. 16 C.F.R. § 310.3(a)(1)(iii). COUNT IV Misrepresentations Regarding the Cost of Services in Violation of the TSR (All Defendants) 92.

The allegations in paragraphs 1-74 are incorporated by reference. 93.

It is a deceptive act or practice under the TSR for a seller or telemarketer to misrepresent, directly or by implication, the total cost to purchase Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 16 of 21 Page ID #:16

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the goods and services that are the subject of the sales offer. 16 C.F.R. § 310.3(a)(2)(i).

94.

Defendants have misrepresented the total cost of their credit repair services.

95.

These representations have been material and likely to mislead consumers acting reasonably under the circumstances. 96.

Because Defendants were each telemarketers, sellers, or both, Defendants’ misrepresentations about the total cost of the credit repair services violate the TSR. 16 C.F.R. § 310.3(a)(2)(i). COUNT V Deceptive Acts or Practices in Violation of the CFPA (All Defendants) 97.

The allegations in paragraphs 1-74 are incorporated by reference. 98.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or by implication, that their actions will or likely will result in the removal of material negative entries on consumers’ credit reports regardless of whether the negative entries were inaccurate or obsolete.

99.

In numerous instances, in connection with the offering or provision of credit repair services, Defendants represented, directly or indirectly, expressly or Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 17 of 21 Page ID #:17

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by implication that their actions will or likely will result in a substantial increase to consumers’ credit scores.

100. These representations have been material and likely to mislead consumers acting reasonably under the circumstances. 101. Because Defendants lacked a reasonable basis for these representations, the representations were deceptive. 102. Defendants’ representations regarding their ability to remove negative entries on consumers’ credit reports and improve consumers’ credit scores were false.

103. In numerous instances, in connection with the offering or provision of credit repair services, Defendants, directly or indirectly, expressly or by implication, made material misrepresentations regarding the terms of their guarantee.

104. Defendants’ marketing has created the net impression that consumers could obtain a full refund if they were not satisfied with Defendants’ services. 105. However, Defendants’ guarantee policy was limited to the removal of one “disputed” item within 180 days, and only applied if consumers agreed to pay for six months of services.

106. In numerous instances, in connection with the offering or provision of credit repair services, Defendants, directly or indirectly, expressly or by Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 18 of 21 Page ID #:18

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implication, made material misrepresentations regarding the costs of their credit repair services.

107. These representations regarding the efficacy of Defendants’ services, the terms of their guarantee, and the cost of their services have been material and likely to mislead consumers acting reasonably under the circumstances. 108. Therefore, Defendants’ representations as described herein have constituted deceptive acts or practices in violation of Sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531, 5536.

COUNT VI Substantial Assistance in Violation of the CFPA (Johnson and Schlegel) 109. The allegations in paragraphs 1-74 are incorporated by reference. 110. CCC, IMC, and Prime are covered persons that committed deceptive acts and practices in violation of the CFPA, 12 U.S.C. § 5536(a)(1). 111. Johnson knowingly or recklessly provided substantial assistance to CCC, IMC, and Prime in their violations of the CFPA. 112. Therefore, Johnson provided substantial assistance to CCC, IMC, and Prime, in violation of the CFPA, 12 U.S.C. § 5536(a)(3). 113. Schlegel knowingly or recklessly provided substantial assistance to CCC, IMC, and Prime in their violations of the CFPA. Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 19 of 21 Page ID #:19

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114. Therefore, Schlegel provided substantial assistance to CCC, IMC, and Prime, in violation of the CFPA, 12 U.S.C. § 5536(a)(3). THIS COURT’S POWER TO GRANT RELIEF 115. The CFPA empowers this Court to grant any appropriate legal or equitable relief including, without limitation, a permanent or temporary injunction, rescission or reformation of contracts, the refund of monies paid, restitution, disgorgement or compensation for unjust enrichment, and monetary relief, including but not limited to civil money penalties, to prevent and remedy any violation of any provision of law enforced by the Bureau. 12 U.S.C. §§ 5538(a); 5565(a), (c).

PRAYER FOR RELIEF The Bureau requests that the Court, as permitted by 12 U.S.C. § 5565: a.

Permanently enjoin Defendants from committing further violations of the CFPA and the TSR and other provisions of Federal consumer financial law as defined by 12 U.S.C. § 5481(14);

b.

Grant additional injunctive relief as the Court may deem to be just and proper;

c.

Award damages and other monetary relief against Defendants as the Court finds necessary to redress injury to consumers resulting from Defendants’ violations of the CFPA and the TSR, including but not limited to rescission or Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 20 of 21 Page ID #:20

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reformation of contracts, the refund of monies paid, restitution, disgorgement or compensation for unjust enrichment; d.

Award Plaintiff civil money penalties; and e.

Award Plaintiff the costs of bringing this action, as well as such other and additional relief as the Court may determine to be just and proper.

Dated: June 27, 2017

Respectfully submitted,

Anthony Alexis Enforcement Director

Deborah Morris Deputy Enforcement Director

Craig Cowie Assistant Litigation Deputy

/s/ Sarah Preis

Sarah Preis (Email: [email protected]) Colin Reardon (Email: [email protected]) Benjamin Clark (Email: [email protected]) 1700 G Street NW Washington, DC 20552 Phone: (202) 435-9318, -9668, -7871 Fax: (202) 435-7722

Attorneys for Plaintiff Consumer Financial Protection Bureau Case 2:17-cv-04720 Document 1 Filed 06/27/17 Page 21 of 21 Page ID #:21

Stipulation (July 2017)

PDF of this document (14 pages)

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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Consumer Financial Protection Bureau,

Plaintiff,

v.

Park View Law (f.k.a. Prime Law Experts, Inc.) and Arthur Barens,

Defendants.

Case No. 2:17-cv-4721-BRO-JEM

STIPULATED FINAL JUDGMENT AND ORDER

Plaintiff, the Consumer Financial Protection Bureau (“Bureau”) commenced this civil action against Defendants Park View Law (f.k.a. Prime Law Experts, Inc.) and Arthur Barens (collectively, “Defendants”) on June 27, 2017, to obtain injunctive relief and disgorgement. Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 1 of 14 Page ID #:158 JS-6

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The 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. Plaintiff and Defendants request that the Court enter this Stipulated Final Judgment and Order (“Order”).

FINDINGS 1) This Court has jurisdiction over the parties and the subject matter of this action.

2) Plaintiff and Defendants agree to entry of this Order to settle and resolve all matters in this dispute arising from the conduct alleged in the Complaint to the date this Order is entered.

3) Defendants neither admit nor deny any allegations in the Complaint, except as specifically stated in this Order. For the purposes of this Order, Defendants admit the facts necessary to establish the Court’s jurisdiction over them and the subject matter of this action.

4) Defendants waive service under Rule 4(d) of the Federal Rules of Civil Procedure and waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Defendants also waive any claim they may Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 2 of 14 Page ID #:159

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have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order. Each party will bear its own costs and expenses, including without limitation attorneys’ fees. 5) Entry of this Order is in the public interest. DEFINITIONS 6) The following definitions apply to this Order: a) “Affected Consumers” includes any consumer who entered into a contract with Corporate Defendant for Credit Repair Services between March 13, 2013 and June 29, 2015. b) “Credit Repair Services” means any good or service that is represented to remove derogatory information from, or improve, a person’s credit history, credit record, or credit rating. c) “Defendants” means the Individual Defendant and the Corporate Defendant, individually and collectively. i) “Corporate Defendant” means Park View Law (f.k.a. Prime Law Experts, Inc.), and its successors and assigns. ii) “Individual Defendant” means Arthur Barens. d) “Effective Date” means the date on which this Order is entered on the docket by this Court.

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e) “Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegate.

f) “Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against a Defendant based on substantially the same facts as described in this Order or the Complaint.

ORDER

IT IS ORDERED that:

I.

Conduct Prohibition 7) Defendants and their officers, agents, servants, employees, and attorneys who have actual notice of this Order, whether acting directly or indirectly, may not violate §§ 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536, and the TSR, 16 C.F.R. pt. 310, in the provision of Credit Repair Services. 8) Defendants, and their officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, are restrained for 5 years from: Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 4 of 14 Page ID #:161

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a) Advertising, marketing, promoting, providing, offering for sale, selling, assisting in the sale of, or administering Credit Repair Services; or b) Receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any person engaged in or assisting in advertising, marketing, promoting, offering for sale, or selling Credit Repair Services.

II.

Customer Information 9) Defendants, and their officers, agents, servants, employees, and attorneys who receive actual notice of this Consent Order, whether acting directly or indirectly, may not disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer’s account (including a credit card, bank account, or other financial account), that Defendant obtained before the Effective Date in connection with the offering or sale of credit repair services. However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order.

// Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 5 of 14 Page ID #:162

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III.

Judgment for Equitable Monetary Relief 10) Under § 1055(a) of the CFPA, 12 U.S.C. § 5565(a), by reason of the alleged violations described in the Complaint, a judgment of equitable monetary relief in the form of disgorgement is entered in favor of the Bureau and against Defendants, jointly and severally, in the amount of $500,000. 11) Within 14 days of the Effective Date, Defendants are ordered to pay $250,000 of the disgorgement amount to the Bureau in the form of a wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions. Within 60 days of the Effective Date, Defendants are ordered to pay the remaining $250,000 of the disgorgement amount to the Bureau in the form of a wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions. The payments shall be deposited in the United States Treasury as disgorgement.

12) With regard to any equitable monetary relief that Defendants pay pursuant to this Section, if Defendants receive, directly or indirectly, any reimbursement or indemnification from any source, including but not limited to payment made pursuant to any insurance policy, or if Defendants secure a tax deduction or tax credit with regard to any federal, state, or local tax, Defendants shall: (a) immediately notify the Enforcement Director in writing, and (b) within 10 days of receiving such funds or monetary benefit, Defendants shall transfer to Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 6 of 14 Page ID #:163

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the Bureau or the Bureau’s agent in compliance with the Bureau’s wiring instructions, the full amount of such funds or monetary benefit. IV.

Additional Monetary Provisions 13) In the event of any default on Defendants’ obligation to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable. 14) Defendants must relinquish all dominion, control, and title to the funds paid or to be paid under this Order to the fullest extent permitted by law and no part of the funds may be returned to Defendants. 15) Under 31 U.S.C. § 7701, Defendants must furnish to the Bureau their taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order. 16) Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Defendants must notify the Enforcement Director of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that Defendants paid or are required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid. // Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 7 of 14 Page ID #:164

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V.

Reporting Requirements 17) Defendants must notify the Bureau of any development that may affect compliance obligations arising under this Order, including but not limited to, any change in structure of Corporate Defendant, including a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendants; or a change in Defendants’ name or address. Defendants must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development.

18) Within 7 days of the Effective Date, Defendants must: a) Designate at least one telephone number and email, physical, and postal address as points of contact, which the Bureau may use to communicate with Defendants;

b) Identify all businesses for which any Defendant is the owner, or that a Defendant directly or indirectly controls, by all of their names, telephone numbers, and physical, postal, email, and Internet addresses;

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c) Describe the activities of each such business, including the products and services offered, and the means of advertising, marketing, and sales;

d) Identify Individual Defendant’s telephone numbers and all email, Internet, physical, and postal addresses, including all residences; and e) Describe in detail Individual Defendant’s involvement in any business that provides Credit Repair Services or which Individual Defendant wholly or partially owns, including Defendant’s title, role, responsibilities, participation, authority, control, and ownership. 19) For 5 years from the Effective Date, the Defendants must report any change in the information required to be submitted under ¶ 17 at least 30 days before the change or as soon as practicable after the learning about the change, whichever is sooner.

20) Within 90 days of the Effective Date, and again one year after the Effective Date, Defendants must submit to the Enforcement Director an accurate written compliance progress report, which, at a minimum: a) Describes in detail the manner and form in which Defendants have complied with this Order; and Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 9 of 14 Page ID #:166

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b) Attaches a copy of each Order Acknowledgment obtained under § VI, unless previously submitted to the Bureau. VI.

Order Distribution and Acknowledgment 21) For 5 years from the Effective Date, Defendants must deliver a copy of this Order to any business entity resulting from any change in structure referred to in ¶ 17, and any future board members and executive officers before they assume their responsibilities.

22) Defendants must secure a signed and dated statement acknowledging receipt of a copy of this Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from all persons receiving a copy of this Order under this Section. VII.

Recordkeeping 23) Defendants must create or, if already created, must retain for at least 5 years from the Effective Date all documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau.

24) Defendants must retain the documents related to the compliance report described in ¶ 23 for at least 5 years. 25) Defendants must make the documents identified in ¶ 23 available to the Bureau upon the Bureau’s request.

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VIII.

Notices 26) Unless otherwise directed in writing by the Bureau, Defendants must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “In re Prime Credit Consultants, Matter No. 2013-0946-02” and send them either:

a) By overnight courier (not the U.S. Postal Service), as follows: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTN: Office of Enforcement 1625 Eye St., N.W.

Washington, DC 20006

b) By first-class mail to the below address and contemporaneously by email to [email protected]: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTN: Office of Enforcement 1700 G Street, N.W.

Washington, DC 20552

IX.

Compliance Monitoring 27) Within 30 days of receipt of a written request from the Bureau, Defendants must submit compliance reports or other requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents.

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28) Defendants must permit Bureau representatives to interview any employee or other person affiliated with Defendants who have agreed to such an interview regarding the subject matter or compliance of this Order. The person interviewed may have counsel present.

29) 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. X.

Retention of Jurisdiction 30) The Court will retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. 31) Notwithstanding the provisions of ¶ 30, any time limits for performance fixed by this Order may be extended by mutual written agreement of the parties and without further Court approval. Additionally, details related to administration of §§ V through X of this Order may be modified by written agreement of the parties and without further Court approval. Any other modifications to this Order may be made only upon approval of the Court, upon motion by any party.

XI.

Release 32) The Bureau releases and discharges Defendants from all potential liability for law violations that the Bureau has or might have asserted based on the practices alleged in the Complaint, to the extent such practices occurred before the Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 12 of 14 Page ID #:169

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Effective Date and the Bureau knows about them as of the Effective Date. The Bureau may use the practices alleged in the Complaint in future enforcement actions against Defendants or their affiliates to establish a pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release does not preclude or affect any right of the Bureau to determine and ensure compliance with this Order, or to seek penalties for any violations of this Order.

IT IS SO ORDERED.

DATED: July 10, 2017

By:

Honorable Beverly R. O’Connell United States District Court Judge

Consented and agreed to:

FOR THE CONSUMER FINANCIAL PROTECTION BUREAU:

ANTHONY ALEXIS Enforcement Director

DEBORAH MORRIS Deputy Enforcement Director

CRAIG COWIE Assistant Litigation Deputy

/s/ Sarah Preis

SARAH PREIS (Email: [email protected]) Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 13 of 14 Page ID #:170

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COLIN REARDON (Email: [email protected]) BENJAMIN CLARK (Email: [email protected]) 1700 G Street NW Washington, DC 20552 Phone: 202-435-9318, -9668, -7871 Fax: (202) 435-7722

Attorneys for Plaintiff Consumer Financial Protection Bureau FOR DEFENDANTS:

PAUL HASTINGS LLP

/s/ Gerald S. Sachs

GERALD S. SACHS D.C. Bar Number 493507 LAUREN KELLY GREENBACKER D.C. Bar Number 1029794 875 15th Street NW Washington DC 20005 Phone: (202) 551-1700 [email protected]

Attorneys for Defendants Park View Law (f.k.a. Prime Law Experts, Inc.) and Arthur Barens Case 2:17-cv-04721-BRO-JEM Document 20 Filed 07/10/17 Page 14 of 14 Page ID #:171

Stipulation (July 2017)

PDF of this document (12 pages)

Page 59

JS-6

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Consumer Financial Protection Bureau,

Plaintiff,

v.

Commercial Credit Consultants (d.b.a. Accurise); IMC Capital L.L.C. (a.k.a. Imperial Meridian Capital L.L.C., Imperial Capital, and IMCA Capital L.L.C.); Prime Credit, L.L.C. (a.k.a. Prime Marketing, L.L.C.; d.b.a. Prime Credit Consultants); Blake Johnson; and Eric Schlegel,

Defendants.

Case No. 2:17-cv-4720

STIPULATED FINAL JUDGMENT AND ORDER

Plaintiff, the Consumer Financial Protection Bureau (“Bureau”) commenced this civil action against Defendants Commercial Credit Consultants (d.b.a. Accurise); IMC Capital L.L.C. (a.k.a. Imperial Meridian Capital L.L.C., Imperial Capital, and IMCA Capital L.L.C); Prime Credit, L.L.C. (a.k.a. Prime Marketing, L.L.C.; d.b.a. Prime Credit Consultants); Blake Johnson; and Eric Schlegel (collectively, “Defendants”) on June 27, 2017, to obtain injunctive relief and civil money penalties.

The 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 Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 1 of 12 Page ID #:171

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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.

Plaintiff and Defendants request that the Court enter this Stipulated Final Judgment and Order (“Order”).

FINDINGS 1) This Court has jurisdiction over the parties and the subject matter of this action. 2) Plaintiff and Defendants agree to entry of this Order to settle and resolve all matters in this dispute arising from the conduct alleged in the Complaint to the date this Order is entered.

3) Defendants neither admit nor deny any allegations in the Complaint, except as specifically stated in this Order. For the purposes of this Order, Defendants admit the facts necessary to establish the Court’s jurisdiction over them and the subject matter of this action. 4) Between August 1, 2009 and September 30, 2014, Defendants charged consumers for credit repair services, and returned a portion of these fees to consumers through either refunds or chargebacks. Defendants caused harm in the amount of the total fees consumers paid, less any refunds they received.

5) Defendants waive service under Rule 4(d) of the Federal Rules of Civil Procedure and waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order. Defendants also waive any claim they may have under the Equal Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action to the date of this Order. Each party will bear its own costs and expenses, including without limitation attorneys’ fees. 6) Entry of this Order is in the public interest.

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DEFINITIONS 7) The following definitions apply to this Order: a) “Affected Consumers” includes any consumer who paid fees to Defendants for Credit Repair Services from August 1, 2009 to September 30, 2014.

b) “Credit Repair Services” means any good or service that is represented to remove derogatory information from, or improve, a person’s credit history, credit record, or credit rating.

c) “Defendants” means all of the Individual Defendants and the Corporate Defendants, individually, collectively, or in any combination. i) “Corporate Defendants” means Commercial Credit Consultants (d.b.a. Accurise); IMC Capital L.L.C. (a.k.a. Imperial Meridian Capital L.L.C., Imperial Capital, and IMCA Capital L.L.C); and Prime Credit, L.L.C. (a.k.a. Prime Marketing, L.L.C.; d.b.a. Prime Credit Consultant), and their successors and assigns.

ii) “Individual Defendants” means Blake Johnson and Eric Schlegel. d) “Effective Date” means the date on which this Order is entered on the docket by this Court.

e) “Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegate. f) “Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 3 of 12 Page ID #:173

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brought against Defendant based on substantially the same facts as described in this Order or the Complaint.

ORDER

IT IS ORDERED that:

I.

Conduct Prohibition 8) Defendants and their officers, agents, servants, employees, and attorneys who have actual notice of this Order, whether acting directly or indirectly, may not violate §§ 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536, and the TSR, 16 C.F.R. pt. 310, in the provision of Credit Repair Services.

9) Defendants, and their officers, agents, servants, and employees who have actual notice of this Consent Order, whether acting directly or indirectly, are restrained for 5 years from:

a) Advertising, marketing, promoting, providing, offering for sale, selling, assisting in the sale of, or administering Credit Repair Services; or b) Receiving any remuneration or other consideration from, holding any ownership interest in, providing services to, or working in any capacity for any person engaged in or assisting in advertising, marketing, promoting, offering for sale, or selling Credit Repair Services.

II.

Customer Information 10) Defendants, and their officers, agents, servants, employees, and attorneys who receive actual notice of this Consent Order, whether acting directly or indirectly, may not disclose, use, or benefit from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 4 of 12 Page ID #:174

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enables access to a customer’s account (including a credit card, bank account, or other financial account), that Defendant obtained before the Effective Date in connection with the offering or sale of credit repair services. However, customer information may be disclosed if requested by a government agency or required by law, regulation, or court order. III.

Civil Money Penalties 11) Under § 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the alleged violations of law described in the Complaint, and taking into account the factors in 12 U.S.C. § 5565(c)(3), a judgment for a civil money penalty is entered in favor of the Bureau and against Defendants, jointly and severally, in the amount of $1,530,000. 12) Within 10 days of the Effective Date, Defendants must pay the civil money penalty by wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.

13) The civil money penalty paid under this Order will be deposited in the Civil Penalty Fund of the Bureau as required by § 1017(d) of the CFPA, 12 U.S.C. § 5497(d). 14) Defendants must treat the civil money penalty paid under this Order as a penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Defendants may not:

a) Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Order; or b) Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Order. Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 5 of 12 Page ID #:175

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15) To preserve the deterrent effect of the civil money penalty in any Related Consumer Action, Defendants may not argue that Defendants are entitled to, nor may Defendants benefit by, any offset or reduction of any compensatory monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action or because of any payment that the Bureau makes from the Civil Penalty Fund (“Penalty Offset”). If the court in any Related Consumer Action grants such a Penalty Offset, Defendants must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.

IV.

Additional Monetary Provisions 16) In the event of any default on Defendants’ obligation to make payment under this Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable.

17) Defendants must relinquish all dominion, control, and title to the funds paid or to be paid under this Order to the fullest extent permitted by law and no part of the funds may be returned to Defendants.

18) Under 31 U.S.C. § 7701, Defendants must furnish to the Bureau their taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.

19) Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, Defendants must notify the Enforcement Director of the final Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 6 of 12 Page ID #:176

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judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that Defendants paid or are required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid. V.

Reporting Requirements 20) Defendants must notify the Bureau of any development that may affect compliance obligations arising under this Order, including but not limited to, any change in structure of any Corporate Defendant, including a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the filing of any bankruptcy or insolvency proceeding by or against Defendants; or a change in Defendants’ name or address. Defendants must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development. 21) Within 7 days of the Effective Date, Defendants must: a) Designate at least one telephone number and email, physical, and postal address as points of contact, which the Bureau may use to communicate with Defendants;

b) Identify all businesses for which any Defendant is the owner, or that a Defendant directly or indirectly controls, by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; c) Describe the activities of each such business, including the products and services offered, and the means of advertising, marketing, and sales; d) Identify Individual Defendants’ telephone numbers and all email, Internet, physical, and postal addresses, including all residences; and Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 7 of 12 Page ID #:177

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e) Describe in detail Individual Defendants’ involvement in any business for which they perform services in any capacity or which they wholly or partially own, including Defendant’s title, role, responsibilities, participation, authority, control, and ownership.

22) For 5 years from the Effective Date, the Defendants must report any change in the information required to be submitted under ¶ 20 at least 30 days before the change or as soon as practicable after learning about the change, whichever is sooner. 23) Within 90 days of the Effective Date, and again one year after the Effective Date, Defendants must submit to the Enforcement Director an accurate written compliance progress report, which, at a minimum:

a) Describes in detail the manner and form in which Defendants have complied with this Order; and b) Attaches a copy of each Order Acknowledgment obtained under § VI, unless previously submitted to the Bureau.

VI.

Order Distribution and Acknowledgment 24) Within 30 days of the Effective Date, Corporate Defendants must deliver a copy of this Order to each entity’s executive officers. 25) For 5 years from the Effective Date, Defendants must deliver a copy of this Order to any business entity resulting from any change in structure referred to in ¶ 20, and any future board members and executive officers before they assume their responsibilities. 26) Defendants must secure a signed and dated statement acknowledging receipt of a copy of this Order, ensuring that any electronic signatures comply with the requirements of the Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 8 of 12 Page ID #:178

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E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from all persons receiving a copy of this Order under this Section.

VII.

Recordkeeping 27) Defendants must create or, if already created, must retain for at least 5 years from the Effective Date all documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau. 28) Defendants must retain the documents related to the compliance report described in ¶ 27 for at least 5 years.

29) Defendants 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, Defendants must provide all submissions, requests, communications, or other documents relating to this Order in writing, with the subject line, “In re Prime Credit Consultants, Matter No. 2013-0946-02” and send them either:

a) By overnight courier (not the U.S. Postal Service), as follows: Assistant Director for Enforcement Consumer Financial Protection Bureau ATTN: Office of Enforcement 1625 Eye St., N.W.

Washington, DC 20006 b) By first-class mail to the below address and contemporaneously by email to [email protected]:

Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 9 of 12 Page ID #:179

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Assistant Director for Enforcement Consumer Financial Protection Bureau ATTN: Office of Enforcement 1700 G Street, N.W.

Washington, DC 20552 IX.

Cooperation with the Bureau 31) Defendants must cooperate fully to help the Bureau determine the identity and location of, and the amount of injury sustained by, each Affected Consumer. Defendants must provide such information in their or their agents’ possession or control within 14 days of receiving a written request from the Bureau.

X.

Compliance Monitoring 32) Within 30 days of receipt of a written request from the Bureau, Defendants must submit compliance reports or other requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents. 33) Defendants must permit Bureau representatives to interview any employee or other person affiliated with Defendants who have agreed to such an interview regarding the subject matter or compliance of this Order. The person interviewed may have counsel present. 34) 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.

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36) Notwithstanding the provisions of ¶ 35, any time limits for performance fixed by this Order may be extended by mutual written agreement of the parties and without further Court approval. Additionally, details related to administration of §§ V through X of this Order may be modified by written agreement of the parties and without further Court approval. Any other modifications to this Order may be made only upon approval of the Court, upon motion by any party.

XII.

Release 37) The Bureau releases and discharges Defendants from all potential liability for law violations that the Bureau has or might have asserted based on the practices alleged in the Complaint, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. The Bureau may use the practices alleged in the Complaint in future enforcement actions against Defendants or their affiliates to establish a pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release does not preclude or affect any right of the Bureau to determine and ensure compliance with this Order, or to seek penalties for any violations of this Order.

IT IS SO ORDERED.

Dated: June 30, 2017

______________________________ UNITED STATES DISTRICT JUDGE

Consented and agreed to:

FOR THE CONSUMER FINANCIAL PROTECTION BUREAU:

Anthony Alexis Enforcement Director

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Deborah Morris Deputy Enforcement Director

Craig Cowie Assistant Litigation Deputy

/s/ Sarah Preis

Sarah Preis (Email: [email protected]) (Phone: 202-435-9318) Colin Reardon (Email: [email protected]) (Phone: 202-435-9668) Benjamin Clark (Email: [email protected]) (Phone: 202-435-7871) 1700 G Street NW Washington, DC 20552 Fax: (202) 435-7722

Attorneys for Plaintiff Consumer Financial Protection Bureau

FOR DEFENDANTS:

/s/ Richard L. Scheff

RICHARD L. SCHEFF (Email: [email protected]) (Telephone: 215-772-7502) DAVID F. HERMAN (Email: [email protected]) (Telephone: 215-772-7620) Montgomery McCracken Walker & Rhoads LLP 123 South Broad Street Philadelphia, PA 19109 Fax: (215) 731-3922

GILLIAN L. WADE (Email: [email protected]) (Telephone: 310-396-9600) Milstein Jackson Fairchild & Wade LLP 10250 Constellation Blvd., 14th Floor Los Angeles, CA 90067 Fax: (310) 396-9625

Attorneys for Defendants Case 2:17-cv-04720-JFW-JEM Document 17 Filed 06/30/17 Page 12 of 12 Page ID #:182