Bureau takes $19M action against Loan Doctor

The CFPB announced Thursday it had taken action against Loan Doctor to resolve the CFPB’s claims that the company and its founder, Edgar Radjabli, broke the law by deceiving consumers into thinking they were depositing funds into a guaranteed return savings product within a commercial bank. The CFPB alleges that Loan Doctor and Radjabli falsely represented that deposited funds would be used to originate loans for healthcare professionals, would be held in insured accounts or backed by cash alternatives, and would yield interest rates between 5% and 6.25%.

If approved by the court, the proposed settlement would require the defendants to refund all the deposits made, including all interest due to consumers. The defendants would also pay a $391,530 civil money penalty, and be permanently banned from engaging or assisting others in any deposit taking activities.

Radjabli has been separately charged by the Securities and Exchange Commission (SEC). The Bureau will remit $241,530 of its penalty because the defendants paid that amount to the SEC. The remaining $150,000 of the Bureau's CMP would be deposited into the Bureau's victims relief fund.