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Student-loan debt-relief business settles with CFPB
The CFPB has reported that it has 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. The Bureau 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. A complaint filed by the CFPB 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.
If the proposed stipulated judgment is approved, the defendants would be permanently banned from providing debt-relief services. The order would impose a judgment on the defendants, jointly and severally, in the amount of about $3.8 million for consumer redress. Full payment of this amount will be suspended if, within 10 days after the order is entered, Timemark pays $5,000, Nagler pays $7,000, and Gassaway pays $10,000. The full amount of redress was suspended because of defendants’ purported limited ability to pay more based on sworn financial statements. The defendants would also be required to each pay a $1 civil money penalty, in light of their financial circumstances.