CFPB files proposed settlement with Credit Repair Cloud and CEO

The CFPB yesterday announced it had filed a proposed order to resolve its lawsuit against Daniel A. Rosen, Inc., d/b/a Credit Repair Cloud and Daniel A. Rosen, its CEO, for providing substantial assistance or support to credit repair businesses that charge illegal advance fees to consumers. The proposed order, if entered by the court, would impose a $2 million civil penalty against Rosen and a $1 million civil penalty against Credit Repair Cloud. The order would also require the company and Rosen to take steps to ensure credit repair companies using Credit Repair Cloud stop charging consumers illegal advance fees.

On September 20, 2021, the Bureau filed a lawsuit against Credit Repair Cloud — a Los Angeles, California, company that since at least 2013 has provided an “all-in-one solution” for people to start their own credit repair businesses — and its owner and CEO, Daniel Rosen. On January 7, 2022, the Bureau filed an amended complaint. The Bureau alleged that Credit Repair Cloud and Daniel Rosen violated the Telemarketing Sales Rule by providing substantial assistance to credit repair businesses that violated the Telemarketing Sales Rule’s advance-fee prohibition. Specifically, the Bureau alleged that Rosen and Credit Repair Cloud encouraged the credit repair businesses that use their services — including Credit Repair Cloud’s trainings, materials, and software — to telemarket and charge unlawful advance fees. The Bureau further alleges that Rosen and Credit Repair Cloud knew or consciously avoided knowing that these credit repair businesses were telemarketing their services and charging consumers unlawful advance fees. The Bureau also alleges that by violating the Telemarketing Sales Rule, Credit Repair Cloud and Daniel Rosen violated the Consumer Financial Protection Act of 2010.