WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) has moved against Loan Doctor and its founder, Edgar Radjabli, resolving claims that they misled consumers regarding a supposed guaranteed return savings product linked to a commercial bank. The CFPB alleges Loan Doctor and Radjabli deceived individuals into believing their deposits would finance loans for healthcare professionals, be secured in insured accounts or by cash equivalents, and generate attractive interest rates between 5% and 6.25%.
Under the proposed settlement, which awaits court approval, Loan Doctor and Radjabli are mandated to refund all consumer deposits, including accrued interest. They are also facing a civil monetary penalty and a permanent prohibition from engaging in or assisting with deposit-taking activities in the future. Furthermore, the Securities and Exchange Commission (SEC) has separately filed charges against Radjabli.
CFPB Director Rohit Chopra stated, “Loan Doctor and its founder presented themselves as a traditional bank to attract individuals seeking high-yield savings products. However, this entity and its leader were actually utilizing customer funds for high-risk investments.”
My Loan Doctor, operating as Loan Doctor, is registered as a financial services company in Delaware, with operations based in West Palm Beach, Florida, and New York City. Loan Doctor marketed a “Healthcare Finance Savings CD account,” claiming it offered “the highest return of any savings product in the US.” Edgar Radjabli, the founder, also held an officer position within Loan Doctor and was responsible for its management.
The CFPB’s investigation revealed that Loan Doctor and Radjabli engaged in deceptive marketing practices while advertising the Healthcare Finance Savings CD account. Beginning in August 2019, Loan Doctor accumulated millions of dollars from at least 400 individuals who invested in this misleadingly promoted savings product. Specifically, the CFPB alleges Loan Doctor and Radjabli made several false claims:
Misleading Claims of Loan Doctor’s Savings Product
Loan Doctor and Radjabli misrepresented key aspects of their “Healthcare Finance Savings CD account,” deceiving consumers about how their money would be used and secured:
- False Promise of Healthcare Professional Loans: Loan Doctor and Radjabli assured depositors that their funds would be used to originate loans for healthcare professionals, with pre-arranged investors ready to purchase these loans. Contrary to these claims, Loan Doctor never used deposits for healthcare loans and had no agreements with loan purchasers or investors.
- Deceptive Claims of Deposit Security: Loan Doctor claimed that deposits not actively used for loans would be held in FDIC-insured accounts, Lloyd’s of London insured accounts, or backed by “cash alternatives” or “cash equivalents.” They also stated maintaining a cash reserve equivalent to customer deposits. However, investigations uncovered that Radjabli invested these funds in a hedge fund under his control and in volatile crypto-assets like Celsius Network. Deposits were also invested in actively traded securities or loaned to investors using stock portfolios as collateral through a third party.
- False Representation as a Commercial Bank: Loan Doctor misled customers into believing they were depositing funds into accounts resembling traditional bank savings accounts with guaranteed returns. In reality, Loan Doctor was not a commercial bank, and depositor funds were placed in risky securities and securities-backed investments.
- Fabricated History of High Interest Rates: Loan Doctor asserted that the Healthcare Finance High-Yield CD accounts had consistently paid interest rates between 5% and 6.25% in the years leading up to 2019. However, Loan Doctor only began accepting consumer deposits in August 2019, making these claims about past performance entirely false.
CFPB Enforcement Action Against Loan Doctor
The CFPB is authorized under the Consumer Financial Protection Act to take action against entities violating consumer financial protection laws, including those engaging in unfair, deceptive, or abusive practices. The proposed settlement against Loan Doctor and Radjabli, if approved by the court, would enforce the following:
- Mandatory Refund to Depositors: Loan Doctor and Radjabli are required to refund approximately $19 million to around 400 depositors. This includes returning the principal deposit and the promised annual interest rate of about 6%, consistent with the advertised terms of the savings product.
- Permanent Ban on Deposit Taking: The settlement includes a permanent injunction, preventing the defendants from any future deposit-taking activities or assisting others in such activities.
- Civil Monetary Penalty: Loan Doctor and Radjabli must pay a civil penalty of $391,530 to the CFPB. Notably, $241,530 of this penalty will be waived because the defendants have already paid this amount in penalties to the SEC for similar violations. The remaining penalty will be allocated to the CFPB’s victims relief fund.
Consumers who wish to file complaints about financial products or services can visit the CFPB’s website or contact them by phone at (855) 411-CFPB (2372).
Individuals with knowledge of potential violations of federal consumer financial laws by their companies are encouraged to report information to [email protected].
The CFPB is dedicated to implementing and enforcing federal consumer financial law, ensuring fairness, transparency, and competitiveness in consumer financial product markets. For further details, please visit www.consumerfinance.gov.
