CFPB Disburses Checks To Prehired Victims Following Pressure From California And 11 State AGs

SACRAMENTO – The Consumer Financial Protection Bureau (CFPB) is providing long-delayed restitution to victims of predatory tech sales program Prehired, LLC (Prehired) after California and several other states pressed for answers in May.

In a letter sent to the CFPB’s acting director on May 6, the Department of Financial Protection and Innovation (DFPI) and 11 other state attorneys general detailed how a 2023 court order against Prehired for illegal, deceptive and abusive practices resulted in $4.2 million in restitution for some 660 consumers nationwide, yet unexplained delays kept those checks from being distributed by the CFPB.

The CFPB previously announced plans for allocation in May 2024. For the remainder of 2024, states received regular updates regarding the federal government’s progress on distributing these funds to Prehired’s victims. In February of this year, the CFPB stopped providing information about the process. That changed earlier this month after 12 states publicly pressured the agency to act.

“Pleased to see the CFPB follow through on the restitution that Prehired victims are entitled to receive,” DFPI Commissioner KC Mohseni said. “Following a long wait, hopefully this development brings closure to those impacted by their predatory practices.”

For years, Prehired used deceptive marketing tactics to lure Californians into paying up to $30,000 for Prehired’s vocational sales training program, guaranteeing its students a “6-figure sales career” within 12 months of completing the program.  As a result of these misrepresentations, students took on large amounts of unsustainable debt.

Once borrowers were indebted to Prehired, the company engaged in unfair debt collection practices by falsely representing the amount of debt owed by consumers, inducing students to enter into harmful “settlement agreements” that benefited Prehired, filing lawsuits, and initiating arbitration proceedings against students nationwide.

California joined other state attorneys general along with the CFPB in a consumer protection enforcement action against Prehired, resulting in the court order requiring Prehired to return $4.2 million to those who made payments to the company.

Joining California in the letter to the CFPB were the states of Colorado, Delaware, Illinois, Massachusetts, Minnesota, New York, North Carolina, Ohio, Oregon, South Carolina, Washington.

About DFPI 

The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and preventing potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.