November 5, 2020 – The Consumer Financial Protection Bureau (Bureau) filed a complaint against Performance SLC, LLC (PSLC), a California debt-relief business focused on federal student loan debt; Performance Settlement, LLC (PSettlement), a California debt-settlement company; and Daniel Crenshaw, the owner and CEO of the two companies.  The Bureau alleges that PSLC and Crenshaw charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to student loan borrowers seeking to obtain loan consolidation, loan forgiveness, or income-driven repayment plans for their federal student loans, and that PSLC failed to make required disclosures to certain consumers in violation of the TSR.  The Bureau also alleges that PSettlement and Crenshaw used deceptive tactics in violation of the Consumer Financial Protection Act (CFPA) in order to induce consumers to sign up for PSettlement’s services.

The Bureau’s complaint, which was filed in federal district court for the Central District of California, alleges that from 2015 through the present, PSLC charged consumers illegal upfront fees by using telemarketing campaigns to convince thousands of consumers to sign up for services to assist them in obtaining loan consolidation, loan forgiveness, or income-driven repayment plans from the U.S. Department of Education (ED).  Consumers would pay between $1,000 and $1,450 in fees to PSLC for it to file paperwork with ED, even though student loan borrowers can do this themselves for free.  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 under the newly altered debt. The Bureau alleges that the PSLC and Crenshaw violated the TSR because consumers were charged at or just after enrollment, before the terms of the debts were altered.  The Bureau also alleges that PSLC had some consumers pay this prohibited upfront fee through high-interest financing from a third party.  Some consumers paid a portion or all of their fee into a trust account, but the complaint alleges that PSLC failed to provide them with disclosures required by the TSR.

The complaint also alleges that PSettlement and Crenshaw, from as early as 2019, engaged in deceptive acts and practices in violation of the CFPA by representing to consumers that PSettlement, a debt-settlement company that does not make loans, had considered and rejected those consumers for personal loans to induce them to sign up for PSettlement’s debt-relief services.  Finally, the Bureau alleges that Crenshaw substantially assisted PSLC in requesting or receiving fees illegally and PSettlement in engaging in deceptive acts and practices.

The complaint seeks redress to consumers, injunctive relief, and the imposition of civil money penalties against the defendants.

The complaint is not a finding or ruling that the defendants have violated the law.

The Bureau’s complaint is available at: https://files.consumerfinance.gov/f/documents/cfpb_performance-slc-llc-performance-settlement-llc-daniel-crenshaw_complaint_2020-11.pdf