The Consumer Financial Protection Bureau (CFPB) informed a California federal court that a debt relief services company and its owner have agreed to cease operations and pay civil penalties after allegedly charging illegal upfront fees.

In a proposed judgment filed on Tuesday, the CFPB stated that Student Loan Pros and its owner, Judith Noh, violated the Telemarketing Sales Rule by collecting over $3.4 million in advance fees from more than 3,300 customers between 2015 and 2019.

If the judgment is approved, Noh will be required to dissolve both Student Loan Pros and FNZA Marketing LLC, another company owned by Noh and implicated in the suit. The judgment also stipulates that Noh and Student Loan Pros pay a joint civil penalty of $2,000, which was determined based on their inability to pay, the CFPB said.

According to the CFPB, Student Loan Pros provided services that involved filing paperwork for consumers to apply for programs that were already available for free from the U.S. Department of Education. The company marketed its services over the phone, making it a "telemarketer" under the Telemarketing Sales Rule.

FNZA Marketing received the advance fees from Student Loan Pros, and the CFPB claims Noh allowed the company’s manager, Syed Gilani, to withdraw and transfer funds from Student Loan Pros’ bank accounts to FNZA Marketing’s for personal use.

The proposed judgment would prohibit Student Loan Pros and Noh from offering debt relief services or other consumer financial products, and bar them from doing business with Gilani or allowing him access to their bank accounts.

The CFPB's case against Gilani remains ongoing.

The case is titled Consumer Financial Protection Bureau v. Judith Noh et al., case number 8:21-cv-00488, in the U.S. District Court for the Central District of California.