On September 15, 2026, the United States District Court for the Western District of New York denied every pending motion to dismiss in CFPB v. StratFS, LLC, No. 1:24-cv-00040, 2026 WL 2718186 (W.D.N.Y. Sept. 15, 2026), the enforcement action brought by the Consumer Financial Protection Bureau and seven state attorneys general against Strategic Financial Solutions and its network of affiliated law firms. The defendants who moved were not the salespeople. They were the litigation support companies, the consulting firm, and the attorneys who owned or managed the affiliated law firms. Their defense was that they never spoke to a consumer, never collected a fee, and only handled back end work after enrollment, so the Telemarketing Sales Rule could not reach them.
The court rejected that framing at the outset, writing that the rule “does not require the provision of ‘front-end’ services, or direct involvement in the alleged TSR violation.” Id. at *12. It then explained what the test actually is. “The threshold for what constitutes ‘substantial assistance’ is low,” and the only requirement is a connection between the help provided and the resulting violation. Id. at *11. The court emphasized this because the defendants had asked it to import a stricter aiding and abetting standard from securities law. The court would not, and it closed the point by saying that the defendants’ position “is based on a misapplication of the law regarding substantial assistance.” Id. at *12. In plain terms, running the hub for the litigation defense that consumers were paying advance fees to receive is not casual or incidental help, and that is all the rule asks.
On knowledge, the defendants argued that they could not have known the notary meetings fell short of the face to face exemption. The court held that the rule “requires knowledge of the facts (the act or practice) comprising the violation, and not knowledge that the conduct was illegal.” Id. at *14. It then addressed the notary argument head on. “The fact that Defendants may have believed their conduct to be legal, or that they attempted to comply with the law regarding the face-to-face presentations, does not mean that they did not have knowledge of the acts constituting the TSR violation.” Id. at *21. The court leaned on this language because the United States Court of Appeals for the Second Circuit had already said the same thing in the preliminary injunction appeal in this very case. CFPB v. Sasson, No. 24-697-cv, 2025 WL 1554514, at *2 (2d Cir. June 2, 2025). Knowing that fees were being collected before any debt was settled is enough. A good faith belief that the notary process worked is not a defense.
The court did leave the door open, and its own words are the right place to end. “Discovery will reveal greater factual detail regarding Fidelis’s connection to the debt-relief scheme, and it may be that Fidelis can successfully make this argument on a motion for summary judgment. But this case is only at the pleading stage, and the allegations in the SAC are sufficient to meet the low threshold for substantial assistance.” StratFS, 2026 WL 2718186, at *13. The defendants live to fight another day, but they will be fighting on the facts, not on the reach of the rule.