Debt Settlement Firm Accused Of Defrauding Thousands

  • Playlist
  • Download
  • Embed
    <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

For the first time, the Consumer Financial Protection Bureau has referred a criminal case to the Department of Justice. The bureau accuses a debt relief company called Mission Settlement Agency of bilking consumers out of millions. The suit alleges the company lied about fees and its results.


A New York-based debt settlement agency has been charged with fraud. Yesterday, the company's owner and three employees were arrested. Federal prosecutors say the company cheated already cash-strapped customers out of millions.

As NPR's Dan Bobkoff reports, this case is notable for another reason: it's the first criminal case based on work by the new Consumer Financial Protection Bureau - an agency created under the law known as the Dodd-Frank Act.

DAN BOBKOFF, BYLINE: A company called Mission Settlement Agency told consumers it could get rid of their debts. Instead, authorities say it just took their money. The complaint says Mission lied about its fees and results. And, in many cases, it took millions from consumers and never paid anything to their creditors. At least 1,200 people were harmed.

Richard Cordray heads the Consumer Financial Protection Bureau, which first uncovered the alleged fraud.

RICHARD CORDRAY: We find that in this, as in many markets, if you're trying to sell a product or service that has little or no value, the only way to do it successfully is by lying about it or hiding the truth from consumers who otherwise would not purchase it.

BOBKOFF: For the new and still-controversial CFPB, this is one way it's now doing business: actively investigating companies and referring what it considers criminal acts over to the Department of Justice. This case is the first to stem from the CFPB's work, and at a Tuesday press conference announcing the charges, Cordray suggested more cases like this are coming.

CORDRAY: We're signaling today that the federal prosecutors here and across the country are our partners. We will be looking for more occasions to coordinate and collaborate with them.

BOBKOFF: With this week's charges, the U.S. Attorney's Office is pursuing a criminal case, while the CFPB filed its own civil action.

Dan Bobkoff, NPR News, New York.

Copyright © 2013 NPR. All rights reserved. Visit our website terms of use and permissions pages at for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.



Please keep your community civil. All comments must follow the Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

NPR thanks our sponsors

Become an NPR sponsor

Support comes from