Al Drago/Bloomberg
WASHINGTON — The CFPB has dismissed its case against Reliant Holdings and its CEO Robert Kane, which the agency previously said tricked subprime consumers into signing up for high fee cards.
The case was dropped with prejudice, meaning the bureau cannot pursue further legal action on this case.
Under former Director Rohit Chopra, the CFPB sued Reliant Holdings, doing business as Horizon Card Services, and Kane, alleging that they pulled consumers into a membership program via deceptive marketing. The membership, according to the complaint filed by the CFPB in September, would charge $300 in annual fees on a card with a $500 credit limit, and it could only be used to purchase goods from the company’s online stores.
“The CFPB is suing Horizon and its CEO Robert Kane for gouging low-income Americans and making it nearly impossible to cancel for a full refund,” Chopra
Specifically, the bureau charged Horizon and Kane with violating the Consumer Financial Protection Act and the Truth in Lending Act by falsely advertising Horizon Card as a regular credit card when it was a membership program, making consumers pay high fees that exceed the 25% cap set by the Truth in Lending Act, and making the process to cancel the membership prohibitively time consuming and difficult.
In a news release at the time, Reliant said that it had been working with the CFPB in good faith, but was blindsided by the filing.
“Unfortunately, after four plus years of active and direct cooperation, we are disappointed to learn of the CFPB’s decision to unexpectedly file suit,” the company said in a news release. “We believe this is an unnecessary step.”
The CFPB dropping this case comes amid a slew of similar actions from the bureau under the Trump administration. Cases against