An immigrant services company preyed on its clients by trapping them into abusive contracts and forcing them to pay exorbitant fees, the Consumer Financial Protection Bureau said in its first major enforcement action under President Joe Biden.
The company, Libre by Nexus, denied any wrongdoing.
The lawsuit, filed Monday, reflects Biden’s effort to return the CFPB to defending consumers more aggressively after the agency faced criticisms for being too business-friendly when Donald Trump was president. It also showcases the CFPB’s new focus on racial equity, CFPB Interim Director David Uejio said during a conference call with reporters Monday.
Libre preyed on Spanish-speaking immigrants in federal detention centers, taking advantage of their desperation to return to their families, and pressuring them into contracts that bound them to pay huge upfront fees equal to up to 30% of their immigration bonds, the CFPB alleges.
Clients also had to pay $420 per month to “lease” GPS ankle monitors until their cases were resolved, usually years later, the CFPB said. The fees piled up to enormous amounts, often more than $17,000 per person, the CFPB said in the lawsuit, filed together with attorneys general from Virginia, Massachusetts, and New York.“Libre presented itself as a lifeline to help people stuck in limbo at immigration facilities. But we believe it was a wolf in sheep’s clothing,” Uejio said in a news release. “This case is a prime example of how people of color are targeted in financial scams and the latent inequity that is too often found in the market for financial products and services. The Bureau won’t stand for it. Stopping these kinds of cash-grab schemes is part of the Bureau’s commitment to addressing racial injustice in the market.”
The investigation started in 2017 in response to complaints of “egregious actions,” said Virginia Attorney General Mark Herring.
In Libre’s telling, it is the government, not the company, that is causing immigrant families to suffer. The company questioned why the states that are filing suit against Libre have ignored the mistreatment of immigrants by Immigration and Customs Enforcement (ICE), another Executive Branch agency that operates in those states.
“Libre by Nexus categorically denies all allegations in the complaint filed against the company today and looks forward to our day in court,” Libre CEO Mike Donovan said in an email. “From Buffalo to Farmville to Suffolk MA, immigrants are tortured while Herring, [New York Attorney General Letitia] James, and others conduct a shadowy investigation into the only company helping the immigrants they claim to be protecting.”
Libre’s strapping of physical devices to its clients—a practice the company says it ended in June after a client died of COVID-19 in a hospital, with company employees allegedly unable to gain access to the facility to remove his monitor—“harkens back to a dark part of the history of this country,” James said at the press conference.
In one case, a man wore an ill-fitting GPS monitor that kept his foot numb for two years; Libre had falsely told him that ICE required him to wear it, according to Massachusetts Attorney General Maura Healey.
“By going after these kinds of practices that target vulnerable immigrants and that disproportionately harm people of color, the CFPB is putting racial equity at the top of its priority list,” a CFPB spokesperson wrote in an email.