WA joins 11 states seeking answers from federal consumer bureau over restitution delays

SEATTLE — Washington Attorney General Nick Brown and leaders from 11 other states today are pressing the federal Consumer Financial Protection Bureau (CFPB) to issue long-delayed restitution to victims of a predatory tech sales program.

In a letter sent today to the CFPB’s acting director, the multistate coalition details how a court order against Prehired LLC for illegal, deceptive and abusive practices resulted in $4.2 million in restitution for some 660 consumers nationwide, yet unexplained delays at the agency level are keeping those checks from being distributed. The court order came in November 2023 and the states worked with the CFPB toward allocating the funds. The CFPB announced the allocation in May 2024.

States received regular updates throughout 2024 regarding the federal government’s progress on distributing these funds to Prehired’s victims. But in February of this year, the CFPB stopped providing information about the process.

“Prehired’s victims include consumers from each of our respective states…and nearly every other state in the nation,” the letter reads. “The CFPB committed to provide relief to these consumers when it made the allocation from the Civil Penalty Fund. During these increasingly difficult economic times, hundreds of Americans look to your leadership to deliver on this commitment.”

Washington state sued the South Carolina company and its founder in 2022 for violating Washington’s Consumer Protection Act, Private Vocational Schools Act, and Collection Agency Act. The state alleged Prehired used deceptive marketing tactics to lure Washingtonians into paying up to $30,000 for Prehired’s unlicensed online sales training program. Most students could not afford to pay, and Prehired offered them income-share loans, which it represented were not loans.

The company “guaranteed” students would land tech sales jobs paying $60,000 or more. Meanwhile, the company demanded monthly payments from students who were earning far less. When students failed to pay on massive debt from the program, Prehired pursued aggressive collection techniques such as filing lawsuits and initiating arbitration proceedings against students across the country.

The state later joined other state attorneys general along with the CFPB in a consumer protection enforcement action against Prehired, resulting in the court order that Prehired return $4.2 million to those who made payments on the company’s loans.

The letter urges the CFPB to respond with a timeframe in which the agency plans to distribute the funds to victims as expected, saying the states and impacted consumers deserve an explanation as to why justice has been delayed.

Joining Washington in the letter are the states of Colorado, Delaware, Illinois, Massachusetts, Minnesota, New York, North Carolina, Ohio, Oregon, South Carolina, and the California Department of Financial Protection and Innovation.

A copy of the letter is available here.

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