Consumer Finance Insights
September 29, 2018

FTC Settles with Student Debt Relief Companies for $19 Million

On September 28, 2018, the Federal Trade Commission (FTC) announced that it had reached a settlement with loan debt relief operators in connection with the coordinated federal-state enforcement initiative to target deceptive student loan debt relief scams, called “Operation Game of Loans.”

According to the FTC, the operators violated the federal law by allegedly participating in a debt relief operation that preyed on consumers with student loan debt by falsely claiming to be associated with the Department of Education or consumers’ loan servicers and by promising reduced monthly loan payments and loan forgiveness, without the authority to do so.  The operators also allegedly charged customers illegal upfront fees for their services.

The settlement orders (located hereherehereherehereherehere, and here) require the operators to pay monetary judgments that collectively total over $19 million.  They also require the operators to cease debt relief activities and making misrepresentations or unsubstantiated claims related to financial or other products or services.