In a lawsuit filed in a New York federal court, the Consumer Financial Protection Bureau (CFPB) accuses an investment firm and its owner of violating the unfair, deceptive, or abusive acts or practices provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The litigation seeks compensation for consumers who were allegedly deceived as well as an injunction and civil penalties.
The CFPB claims that the financial services company told health care professionals that the money they put into high-yield CD savings accounts would be used to provide loans to other doctors and medical specialists. The firm also told depositors that it had investors lined up to purchase the loans.
According to the lawsuit, none of the money was used for this purpose. The promises made by the company are said to have convinced about 400 health care professionals to invest more than $15 million. The company began offering the CD savings accounts in August 2019, according to court papers.
The lawsuit also alleges that the company continued to offer the savings accounts even after learning about a CFPB investigation. After removing the products from its website, the company is accused of using financial advisers to offer the savings accounts under a different name. The CFPB says that the owner of the company did not inform financial advisers about the official investigation and instead claimed that a name change was needed to placate lending institutions offering similar products.