| The Consumer Financial Protection Bureau last week took action on two separate accounts against the ringleaders of a robo-calling scheme aimed at collecting phantom debts and a mortgage lender it accused of deceptive advertising practices.
In the first instance, the CFPB announced last Wednesday that it had filed a lawsuit against Marcus Brown and Mohan Bagga, accusing the pair of leading a group that threatened, harassed and deceived consumers so they could collect on phantom debts that consumers did not actually owe or were not payable to Brown and Bagga’s operation.
According to the complaint, Brown and Bagga and those working with them used many fictitious names as they threatened consumers with arrest, wage garnishment and “financial restraining orders.” The CFPB’s claims against these defendants are based on the Consumer Financial Protection Act and the Fair Debt Collection Practices Act.
The CFPB said the scheme was based in New York and Georgia, where Brown and Bagga live, respectively. In its suit, the bureau also names Brown’s wife, Tasha Pratcher, his sister Sarita Brown, Bagga’s ex-wife Varinderjit Bagga and another individual, Sumant Khan, along with the debt collection companies Brown and Bagga formed to run these operations.
Then on Thursday, the bureau announced it took action against RMK Financial Corp. for what it called deceptive mortgage advertising practices. The CFPB ordered the company to end its practices and pay a civil penalty of $250,000.
According to the CFPB, the California-based mortgage lender, which also does business under the name Majestic Home Loans, mailed print advertisements to more than 100,000 consumers across several states, using the names and logos of the Department of Veteran Affairs and the Federal Housing Administration, falsely implying affiliation with or endorsement by those government entities.
The bureau said RMK’s practices violated the Truth in Lending Act, the Mortgage Acts and Practices Advertising Rule and other federal consumer laws. Under the terms of the consent order, the company is prohibited from falsely implying government affiliation and ordered to pay the quarter-million-dollar civil penalty.
