The Consumer Financial Protection Bureau (CFPB) on Wednesday accused the investment bank Herbalit Inc. of engaging in deceptive marketing practices, including a scheme to artificially inflate the number of people who were enrolled in the company’s financial services program.
The agency announced the charges in a lawsuit filed by the Center for Responsible Lending, a consumer watchdog group.
The CFPB alleges that Herbalits misleading marketing tactics created a false impression of its customer base, which it said created a market for Herbalis products and services that was skewed toward high-income customers.
The company’s chief executive officer, Kevin D. Dolan, has been accused of selling a stock that had an average annual return of more than 5% on its publicly traded stock in 2013, but Herbalitts shares have fallen over the years, according to the lawsuit.
The FTC’s complaint alleges that the company manipulated its customer enrollment data to make it appear that Herbelis enrollments were rising faster than they were, and that Herbals marketing efforts resulted in a substantial reduction in enrollment of people in high-risk groups such as students, veterans, people with disabilities, and students from low-income families.
The complaint also alleges that many Herbaliti products were not sold through the company.
Herbalit is the second largest investment bank by assets, with more than $6.6 trillion in assets, according the CFPBS complaint.
The firm’s marketing strategy has included a website that featured “herbalis coupons” and a social media page, the CTFB alleges.
On its website, HerbalIT promoted its “herbals” as “the safest way to start your career” and stated that Herblis had a $25 annual fee for its enrollment program.
However, the company did not have any direct connection to its financial services product, according a statement provided to The Associated Press by the CTPB.
Instead, the statement said that Herbinis had created an account that was “paid for by your bank.”
“Our goal is to provide our customers with a smooth experience,” the statement read.
“We believe this is the right way to get started and we want to make sure we’re not hurting anyone.”
The company did, however, admit that its enrollment process was not as smooth as advertised, the complaint states.
The court documents allege that the Herbality website “is not designed to help consumers navigate the registration process.
It is an informational site that has not been designed to allow consumers to create an account, receive a deposit, or get a financial services package.”CFPBS’ complaint says that Herbais marketing efforts also included the use of a “my account” function to make Herbalises enrollments appear that people were “creating an account to participate in a product or service.”
However, in addition to the My Account function, the agency also alleged that Herbnis had developed an automated enrollment tool that would allow Herbalist to enroll people with a specific “credit score” as part of its enrollment, and the company also engaged in deceptive advertising that falsely claimed that Herbas were more than 60% less expensive than other products.
The lawsuit alleges that Shebalits marketing strategy included a series of misleading claims about the benefits of Herbalism and the financial services company.
Specifically, the lawsuit said, Herbelits marketing efforts included the claims that: “The financial services industry offers a wide range of services to its members, and those services include financial planning, personal loans, savings accounts, life insurance, and even tax preparation.”
It also said that Shebelis’ marketing strategy also included: “We are able to offer a broad range of financial services to our members, with the primary focus being on making sure that we provide our members with the highest quality financial services.”
We believe our business model is sound,” the CFSB said in a statement.”
The fact that our business has a healthy business and we have been able to successfully expand our membership and service offerings are important factors in the complaint.
We look forward to defending the complaint vigorously and are confident that our complaint will help restore trust in the financial industry.
“The complaint alleges in the case that Herbeis’ deceptive marketing tactics “created a market that was biased toward high income customers, and resulted in the fraud and deceptive conduct that the CFAV and CFPBC are alleging.
“The CFAZ and CFIZ, the two consumer watchdog groups, said in their joint statement that the fraud accusations were not surprising.”
Moreover, the fraud allegations allege that”
As we previously wrote, the FTC has repeatedly highlighted how the company was able to deceive members into believing that Herbolis had the highest level of financial support in the industry.”
Moreover, the fraud allegations allege that