The Federal Trade Commission (FTC) has taken action to halt student loan debt relief schemes that allegedly defrauded students out of millions of dollars. According to a press release on the FTC’s website, these deceptive operations promised to assist students in reducing or eliminating their student loan debt burden but instead scammed them into false promises and illegal practices.
The FTC accuses several individuals and their associated companies of running these fraudulent schemes. The defendants allegedly used deceptive marketing tactics, claiming they had special relationships with the Departments of Education or other government entities. They promised to negotiate loan forgiveness or lower monthly payments, charging upfront fees or monthly payments for their services. However, the FTC found that these companies failed to deliver on their promises, leaving many students in a worse financial situation.
The FTC’s complaint, filed in federal court, seeks to permanently ban the defendants from engaging in student loan debt relief activities and to provide refunds to affected consumers. The agency also urges students to be cautious and skeptical of companies promising quick and easy solutions to student loan debt. They encourage borrowers to reach out to their loan services directly or to consult with nonprofit credit counseling agencies for legitimate assistance.
This enforcement action highlights the FTC’s commitment to protecting students and holding accountable those who engage in fraudulent practices in the student loan industry.
Source: FTC Stops Student Loan Debt Relief Schemes that it Says Bilked Students Out of Millions