The Consumer Financial Protection Bureau (CFPB) settled with Timemark, Inc., a company based in Deerfield Beach, Florida, that provides debt-relief services to consumers with federal student-loan debt, and with its owners and officers, Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway, according to a CFPB press release. The CFPB alleged that the defendants charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to consumers who were seeking to renegotiate, settle, reduce, or alter the terms of their loans. If entered by the court, the proposed order memorializing the settlement will permanently ban defendants from providing debt-relief services and impose a judgment totaling approximately $3.8 million in consumer redress and civil money penalties. The CFPB’s complaint, which was filed in federal district court for the Southern District of Florida, alleged that from 2016 through October 2019, the defendants used telemarketing campaigns to convince more than 7,300 consumers to pay up to $699 in fees to file paperwork to reduce or eliminate their monthly payments for their federal student loans, through loan consolidation, forgiveness, or income-driven repayment plans. The U.S. Department of Education, however, offers these options to student loan borrowers for free. Moreover, under the TSR, it is illegal to request or receive any fees for debt-relief services sold through telemarketing before the terms of the debt are altered or settled, and the consumer has made at least one payment pursuant to the new arrangement. The CFPB alleges that the defendants violated the TSR because they requested and received payments from consumers within a few days, or at the latest, within 30 days of their enrollment — before the terms of the debts were altered.
