DFPI Secures First Administrative Ruling Upholding CCFPL Enforcement Authority

Case Snapshot

• Court: California Department of Financial Protection and Innovation administrative proceeding
• Case: In the Matter of the Commissioner of Financial Protection and Innovation v. Career Excel LLC d/b/a Professionstar
• Core Issue: Scope of DFPI enforcement authority under the California Consumer Financial Protection Law
• Key Allegation: The company allegedly engaged in unlawful debt collection, debt settlement, and credit repair practices targeting California consumers
• Holding: The ruling affirmed that the CCFPL permits DFPI enforcement involving violations of California and federal consumer financial laws tied to debt collection and related services
• Outcome: Desist and refrain order upheld with ancillary relief and $150,000 administrative penalty
• Notable Detail: The order included rescission of California consumer agreements and refund obligations in addition to penalties

The California Department of Financial Protection and Innovation (DFPI) announced that it secured its first administrative decision affirming an enforcement action brought under the California Consumer Financial Protection Law (CCFPL), a development that could strengthen the agency’s oversight authority over debt collectors, debt settlement providers, and credit repair organizations operating in the state.

According to the DFPI’s May Monthly Bulletin, the ruling upheld enforcement actions against Career Excel LLC, doing business as Professionstar, and confirmed that the CCFPL authorizes the agency to pursue violations of California and federal consumer financial laws tied to debt collection, debt settlement, and credit repair services.

The agency said the ruling also affirmed its authority to seek ancillary relief, including rescission, refunds, and monetary penalties.

The underlying desist and refrain order, issued Jan. 17, 2025, alleged that Professionstar engaged in unlawful and deceptive practices involving California consumers from January 2021 through at least January 2025.

DFPI Alleged Deceptive Debt Collection Practices

According to the order, the company allegedly contacted California consumers regarding purported payday loan debts and made false or misleading representations concerning lawsuits, wage garnishment, criminal charges, and incarceration.

The DFPI alleged consumers were told they could face arrest, jail time, misdemeanor or felony records, wage garnishment, or legal action if they failed to pay the alleged debts. The agency further alleged that some consumers were told lawsuits or judgments already existed against them, despite consumers reportedly being unable to verify the existence of those cases through court records or credit reports.

The order also alleged that Professionstar attempted to collect time-barred debts tied to alleged payday loans dating back to 2006 and 2009 without providing disclosures required under California law for collection of stale debt.

In addition, the DFPI alleged that consumers did not receive required debt validation notices or verification documentation under the Fair Debt Collection Practices Act despite requesting proof of the alleged debts.

The agency also alleged Professionstar operated as a debt collector in California without obtaining a required license under the state’s Debt Collection Licensing Act.

Credit Repair and Debt Settlement Allegations

Beyond debt collection activity, the order alleged that Professionstar provided credit repair and debt settlement services without complying with California and federal requirements governing those industries.

According to the DFPI, consumers were presented with agreements describing services related to improving credit reports, improving credit ratings, stopping collection calls, and negotiating debts for reduced amounts.

The order alleged that the company failed to obtain required California registrations and certifications associated with credit services activities. The DFPI also alleged the company violated advance-fee prohibitions by requiring consumers to make payments before services were performed. Additionally, the order alleged that required disclosures under California’s Fair Debt Settlement Practices Act (CFDSPA) and Credit Services Act were not included in agreements provided to consumers.

The agency stated that consumers ultimately did not receive the promised assistance related to credit improvement or debt negotiation services.

Ruling Reinforces Broad CCFPL Authority

The ruling may carry broader implications for companies operating in California’s consumer financial services market because it reinforces the DFPI’s interpretation of the CCFPL as a wide-ranging enforcement tool.

The order identifies multiple statutes as “consumer financial laws” under the CCFPL framework, including the FDCPA, Rosenthal Fair Debt Collection Practices Act, Debt Collection Licensing Act, Telemarketing Sales Rule, Credit Repair Organizations Act, California Credit Services Act, and California Fair Debt Settlement Practices Act.

The order further states that the CCFPL applies to covered persons offering consumer financial products or services, including debt collection, debt settlement, and credit counseling-related activities.

As part of the enforcement action, the DFPI ordered rescission of existing agreements with California consumers, prohibited assignment or transfer of those agreements, required refunds of money collected from California residents, and assessed a $150,000 administrative penalty.

Why It Matters

The decision adds to a growing body of California enforcement activity involving nonbank financial services providers and may signal continued aggressive use of the CCFPL in conjunction with existing federal and state consumer protection laws.

For debt collectors, debt settlement companies, and credit repair providers operating in California, the ruling highlights the compliance risks associated with overlapping regulatory frameworks. Those risks extend beyond traditional FDCPA requirements and now increasingly involve state licensing, disclosure, registration, debt validation, time-barred debt, and fee-restriction requirements enforced through the CCFPL.

The case also demonstrates the DFPI’s willingness to pursue ancillary remedies in addition to civil penalties, including contract rescission and consumer refunds.