The Consumer Financial Protection Bureau (CFPB) has distributed more than $384m to about 191,000 consumers harmed by Think Finance. The Texas-based online lender deceived borrowers into repaying loans they did not owe. The CFPB distributed the money through its victims relief fund.

The CFPB’s victims relief fund is also known as the Civil Penalty Fund It has now distributed more than $1bn to consumers harmed by scams, frauds, and other illegal practices. The CFPB’s victims relief fund is a unique tool that helps the agency make harmed consumers whole when lawbreakers are unable to fully compensate their victims.

Penalties paid into, and disbursed from, the victims’ relief fund are separate from monetary redress the CFPB orders lawbreakers to pay directly to harmed consumers.

“Too often, victims of financial crimes are left without recourse even when the companies that harm them are stopped by law enforcement,” said CFPB Director Rohit Chopra. “The victims relief fund allows the CFPB to help consumers even when bad actors have squandered their ill-gotten profits.”

Think Finance

In November 2017, the CFPB filed a lawsuit against Think Finance. It alleged that the company deceived consumers into repaying loans they did not owe. Think Finance illegally collected on loans that were void under state laws governing interest rate caps and lender licensing requirements. The company misrepresented to consumers that they owed money on these loans. It made electronic withdrawals from consumers’ bank accounts and sent letters demanding payment.

The CFPB’s victims relief fund’s $384m distribution to consumers harmed by Think Finance is a result of the CFPB’s prosecution. It provides financial redress to consumers who Think Finance lied to, and who lost money due its illegal practices.

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The CFPB’s Victims Relief Fund

Congress created the CFPB’s victims relief fund in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since opening its doors, the CFPB has distributed funds to consumers harmed in cases involving illegal practices. Examples include student loan and mortgage relief scams, predatory lending, and illegal debt collection. Most law enforcement tools are designed to find and punish lawbreakers. However, the victims relief fund authorises the CFPB to compensate harmed consumers.