Consumer Finance Insights
February 13, 2018

Student Loan Debt Relief Company Banned from Doing Business in Kansas

On February 6, 2018, a Kansas state court entered a default judgment against a Florida student debt relief company banning it from doing business in Kansas and ordering it to pay over $39,000 back to one consumer.

Kansas Attorney General Derek Schmidt (“Kansas AG”) had accused the company of violating the Kansas Consumer Protection Act, K.S.A. 50-627, by offering consumers “loan consolidation preparation services” for a fee even though such services are available free of charge from the United States Department of Education, and for allegedly making misrepresentations on its website.  The complaint further alleged that the defendant made false statements to consumers when it denied it was under investigation, when in fact Florida, Oregon, and Washington have active investigations into the company.  The Kansas AG brought the action in December 2017; defendant company failed to respond to the complaint.

In the default judgment, the court permanently enjoined the company from engaging in business in the state of Kansas, and ordered that it pay $39,012 in restitution to one Kansas consumer, as well as $50,000 in civil penalties, plus the Kansas AG’s reasonable investigative fees.

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