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CFPB Announces $18 Million Judgment Against California-Based Mortgage Lender
May 14, 2020
The Consumer Financial Protection Bureau has filed a proposed stipulated final judgment to resolve its allegations in its lawsuit against California mortgage lender

The Consumer Financial Protection Bureau has filed a proposed stipulated final judgment to resolve a lawsuit against California mortgage lender Chou Team Realty LLC, which does business as Monster Loans, and several individuals and related companies, including Thomas Chou and Sean Cowell. The proposed settlement, if the court agrees, would impose an $18 million redress judgment.
The CFPB alleges that Chou and Cowell were among the leaders of a scheme to use Monster Loans’ account with a major credit bureau to unlawfully obtain consumer reports for their associated student loan debt-relief companies. Those companies, in turn used the consumer reports to deceptively market their services nationwide and then charged consumers illegal fees. The proposed settlement also bans Monster Loans, Chou, and Cowell from the debt-relief industry, and imposes a total $450,001 civil money penalty against them.
According to the CFPB’s lawsuit, between 2015 and 2017, Monster Loans violated the Fair Credit Reporting Act (FCRA) by obtaining consumer report information for over seven million consumers with student loan debt from a major credit bureau based on the false representation that the company would be marketing mortgage loans to consumers. Monster Loans allegedly provided the reports to several associated student loan debt-relief companies to use in selling their services.
The CFPB also alleged that in 2017, Monster Loans helped create a sham entity “Lend Tech Loans” to perpetuate the scheme to unlawfully obtain consumer reports.  Lend Tech Loans purported to be a mortgage brokerage, but has only ever been used to unlawfully obtain consumer report information. As alleged in the complaint, because of Monster Loans’ assistance, Lend Tech Loans was able to wrongfully obtain consumer reports for over 12 million additional consumers between 2017 and 2019.
The CFPB further alleged that, with Monster Loans’ assistance, the student loan debt-relief companies violated the Consumer Financial Protection Act and the Telemarketing Sales Rule by making several deceptive representations about the companies’ services and unlawfully collected advance fees for debt-relief services.
Chou and Cowell were officers of Monster Loans, investors in the student-loan debt relief companies, and allegedly helped create Lend Tech Loans. The CFPB alleged that they participated in the FCRA violations and then received purported profits from the student-loan debt-relief companies. As alleged in the complaint, those profits represented funds that were wrongfully taken from consumers through unlawful conduct. If the court approves the proposed settlement, Monster Loans, Chou and Cowell will also be subject to limits on using or obtaining consumer reports, including a ban from using or obtaining pre-screened consumer reports.
If entered by the court, the settlement will also impose a judgment for redress of $18 million against Monster Loans. As explained in the proposed order, full payment of the judgment for redress will be suspended subject to Monster Loans’ payment of $200,000 for consumer redress. The settlement will also require Chou and his company to disgorge $403,750 in profits for the purpose of providing redress and will impose a judgment for redress of $406,150 against Cowell and his company, which will be suspended. These suspended amounts account for certain of these defendants’ limited ability to pay more based on sworn financial statements. If the court enters the proposed settlement, Monster Loans will pay a $1 civil penalty based on its documented inability to pay, Chou will pay a $350,000 penalty, and Cowell will pay a $100,000 penalty. The penalties will be paid to the CFPB and deposited in the Bureau’s Civil Penalty Fund.
The CFPB and Chou Team Realty LLC; Thomas Chou; Sean Cowell; TDK Enterprises LLC; and Cre8labs Inc. agreed to entry of the stipulated final judgment and order, without determining any issue of fact or law, to settle and resolve all matters in alleged in the complaint. They could not immediately be reached for comment on the proposed settlement.

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