The CFPB and seven state attorneys general sued Strategic Financial Solutions (SFS) and its shell firms for illegal debt relief. The CFPB and state attorneys general sued Ryan Sasson and Jason Blust, the criminal enterprise’s masterminds. The CFPB and attorneys general say the company charged vulnerable clients hundreds of millions of dollars in illegal fees. The CFPB and attorneys general sealed the litigation on January 10, 2024. They want the court to stop the enterprise’s unlawful conduct, compensate consumers, and impose a civil money penalty. The CFPB has seven new members: Colorado, Delaware, Illinois, Minnesota, New York, North Carolina, and Wisconsin.
CFPB Director Rohit Chopra said the scheme’s operators used shell companies and law firms to mask their illicit conduct from law enforcement. “The CFPB and state attorneys general are seeking to shut down this outfit’s illegal activity.”
Financially strapped consumers who wanted to pay off their obligations went to the defendants. However, Colorado Attorney General Phil Weiser exploited them, worsening their situation. I won’t hesitate to hold accountable anyone who deceives or harms consumers, especially those in financial distress.”
“The architects of this fraud deliberately and knowingly preyed on vulnerable Delawareans,” said Attorney General Kathy Jennings. “This elaborate fraud web was designed to ensnare, exploit, and obfuscate for profit over people. We will not spare them. I appreciate the CFPB and our sister states for defending this scheme’s victims.”
“Consumers struggling financially and trying to pay down their debt need real help, not false promises and predatory fees,” Illinois Attorney General Kwame Raoul stated. “I thank the CFPB for their ongoing partnership in protecting the public from fraud and deceptive business practices.”
“Consumers came to Strategic Financial Solutions for debt relief but were ripped off. Taking advantage of debtors is unethical, said Minnesota Attorney General Keith Ellison. I am delighted to be working with the Consumer Financial Protection Bureau and other attorneys general to stop Strategic Financial Solutions’ illegal and unethical activities and refund money to scam victims.”
“People can fall into debt, but New Yorkers—and all Americans—should not face even greater financial hardship when seeking help,” said Attorney General Letitia James. “StratFS, Sasson, and Blust exploited hardworking consumers to enrich themselves and their business by charging illegal fees. This case should serve as a warning to those who would follow in their footsteps: we will utilize the law to prohibit exploitative schemes and safeguard consumers. I appreciate CFPB and my fellow attorneys general’s partnership in protecting hardworking Americans.”
“North Carolinians were looking for help with their debts,” stated AG Josh Stein. Instead, these phony law firms deceived them and cost them more. I will do everything I can to hold lawbreakers and exploiters accountable.”
Strategic Financial Solutions promotes debt alleviation. New York City and Buffalo are its offices. Ryan Sasson is SFS CEO. Sasson and scheme architect Jason Blust run a labyrinth of shell businesses and façade legal firms that includes SFS.
SFS is accused of defrauding consumers and regulators through dozens of businesses. The company advertises to financially vulnerable consumers through third parties. Advertisements suggest consumers may qualify for debt-reduction loans. SFS representatives call consumers to discuss these loans. SFS encourages consumers to join in its debt-relief programs even though most do not qualify for the offered loans. SFS claims its legal companies and lawyers will negotiate lower debt levels.
SFS offers few debt-relief services. SFS demands quick escrow account payments. SFS takes escrow account fees before settling obligations. Sasson and Blust profit from their shell companies’ escrow account fees while consumers suffer from unlawful costs and fraudulent legal claims.
The CFPB and seven state attorneys general say SFS violated the Telemarketing Sales Rule. The lawsuit claims New York and Wisconsin state law violations. The complaint claims SFS affects customers by:
Charging illegal advance fees: SFS collects money before consumers settle their bills. SFS imposes fixed fees regardless of settlements or debt-relief savings. SFS and its façade firms have taken over $100 million from consumers before debt-relief payments to creditors since 2016.
SFS misleads consumers into thinking contracted law firms will negotiate lower payback amounts. SFS and its non-lawyers negotiate debt reduction, if any, behind the firms.
Police Action
The CFPB can prosecute nonbank financial organizations, including debt-relief companies, for breaking consumer financial protection laws and rules like the Telemarketing Sales Rule. The lawsuit demands that SFS discontinue its claimed illegal activity, compensate damaged consumers, and pay a civil money penalty to the CFPB’s victims compensation fund.
CFPB filed a case and asked for a temporary restraining order and preliminary injunction in the U.S. District Court for the Western District of New York on January 10, 2024. January 11, 2024, the court granted a temporary restraining order.
Read the January 10, 2024 complaint.
Discover debt reduction services.
The CFPB accepts financial product and service complaints online and at (855) 411-CFPB (2372).
Employees who suspect their firms have violated federal consumer financial protection rules should email whistleblower@cfpb.gov. The CFPB website has information on reporting industry misbehavior.
Consumers in Colorado could report phony debt-relief scams to the Attorney General’s Office at StopFraudColorado.gov.
Illinois residents who suspect fraud can file a complaint on the Attorney General’s website. The Illinois Attorney General’s Consumer Fraud Hotlines are also available: