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On December 17, 2015, the Consumer Financial Protection Bureau (CFPB) announced three separate enforcement actions against two online lead originators and a so-called “buy-here, pay-here” auto dealer and its affiliated finance company.

Lead Originators Enforcement Actions

The CFPB brought two separate enforcement actions against online lead originators.  In the first action, the CFPB filed a complaint in federal district court in California against D and D Marketing, Inc., d/b/a T3 Leads (T3 Leads) and its owners, Grigor and Marina Demirchyan.  T3 Leads is a lead aggregator that buys consumer information from lead generators and sells those leads to payday or installment lenders and others.  The CFPB alleges that T3 Leads and the Demirchyans violated the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).  Specifically, the CFPB alleges that T3 Leads:

  • ignored lead generators’ misleading statements to consumers that their loan applications would be paired with lenders that met certain lending “standards”;
  • failed to vet lead purchasers before adding them to its network and selling them leads and failed to require lenders to certify that they complied with applicable state laws; and
  • steered consumers toward unfavorable loans, often because those lenders paid T3 Leads the highest amount for the leads.

The CFPB is seeking monetary and injunctive relief against T3 Leads and the Demirchyans.

You can view the T3 Leads/Demirchyans complaint here:

In the second action, the CFPB filed an administrative consent order against Lead Publisher and its owner Eric Sancho.  Lead Publisher, like T3 Leads, bought and sold leads, which contained personal information such as consumers’ names, telephone numbers, home and email addresses, references, and employer information.  The CFPB alleges that Lead Publisher and Sancho violated the Dodd-Frank Act by selling millions of leads to related companies that used the information to harass and deceive consumers into paying alleged debts that they did not actually owe.  Specifically, the CFPB alleges that Sancho and Lead Publisher:

  • sold approximately three million consumer leads to related entities (which entities the CFPB previously brought enforcement actions against) that threatened, harassed, and defrauded consumers out of millions of dollars; and
  • facilitated fraud by permitting the related entities that purchased leads to threaten consumers with fake legal actions, such as restraining orders, in order to collect debts.

Although Lead Publisher is now out of business, the CFPB consent order bans Sancho from the financial products and online consumer leads industries and requires him to disgorge $21,151 that he obtained as a result of his allegedly unlawful conduct.

You can view the Lead Publisher/Sancho Consent Order here:

Auto Dealer Enforcement Action

The CFPB also announced an enforcement action against Interstate Auto Group, Inc., d/b/a CarHop, one of the country’s largest “buy-here, pay-here” auto dealers and its affiliated finance company, Universal Acceptance Corporation.  Universal Acceptance Corporation, on behalf of CarHop, provided consumer account information to the three major consumer reporting companies on a monthly basis.  The CFPB administrative consent order alleges that CarHop and Universal Acceptance Corporation violated the Fair Credit Reporting Act and the Consumer Financial Protection Act by providing consumer reporting companies with information related to consumer accounts that they knew or had reason to believe was inaccurate.  Specifically, the CFPB alleges that CarHop and Universal Acceptance Corporation:

  • deceived consumers by representing that CarHop would furnish “good credit” information to the credit reporting companies, even though CarHop never provided any positive credit information about consumers;
  • provided inaccurate information to the credit reporting companies that consumers still owed money or that their cars were repossessed, when consumers lawfully returned cars within 72 hours of purchase; and
  • failed to maintain adequate written policies and procedures related to the accuracy and integrity of the consumer information it furnished to credit reporting companies.

The CFPB consent order requires CarHop and Universal Acceptance Corporation to:

  • stop misrepresenting that they will report “good credit” or other positive information to the credit reporting companies;
  • notify the credit reporting companies of any inaccuracies related to information that they provided to those reporting companies;
  • provide credit reports to consumers who had incorrect information submitted to the credit reporting companies about their accounts;
  • implement a process for auditing information that is submitted to the credit reporting companies; and
  • pay a $6,465,000 civil penalty.

You can view the CarHop/Universal Acceptance Corporation Consent Order here:


Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

Zane Gilmer is a member of the firm’s litigation practice group.  His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce.  Zane works out of the firm’s Denver office and he can be reached at or 303.376.8416.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.