Prehired, LLC, Prehired Recruiting, LLC, and Prehired Accelerator, LLC
On July 13, 2023, the Bureau and several state partners filed a complaint in an adversary proceeding against Prehired, LLC, Prehired Recruiting, LLC, and Prehired Accelerator, LLC. Prehired has its principal place of business in Delaware and, prior to filing bankruptcy, operated a private, for-profit vocational training program for software sales representatives. Prehired charged up to $30,000 for its program and encouraged consumers who could not pay upfront to enter into income share agreements. Prehired’s income share agreements required consumers to make minimum payments equal to between 12.5% and 16% of their gross income for 4 to 8 years or until they had paid a total of $30,000, whichever was sooner. Prehired transferred ownership of many of these financing agreements to other entities, including Prehired Recruiting and Prehired Accelerator. The complaint alleges that Prehired deceptively represented that its income share agreements were not loans; deceptively represented that consumers would pay nothing until they had a job making at least $60,000 a year; and failed to disclose key financing terms required by the Truth in Lending Act and Regulation Z. The complaint also alleges that Prehired Recruiting engaged in unfair acts and practices by filing debt collection lawsuits in a distant forum when consumers neither lived in that forum nor were in that forum when they executed the financing agreement. The complaint further alleges that Prehired Recruiting and Prehired Accelerator violated the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Act of 2010 by deceptively inducing consumers to enter into settlement agreements, and the FDCPA by claiming the consumers owed more than they did. The attorneys general from Washington, Oregon, Delaware, Minnesota, Illinois, Wisconsin, Massachusetts, North Carolina, South Carolina, and Virginia, and California’s Department of Financial Protection and Innovation joined the action. The complaint seeks to void the income share loans, damages, and civil money penalties.