On November 18, 2022, the Minnesota Attorney General’s Office (Minnesota AG) announced that it entered into a consent order with a California student-loan debt-relief company to resolve allegations that the company illegally collected fees from customers and mispresented its services to consumers.
According to the Minnesota AG, the company “falsely promised consumers student-loan forgiveness” despite the fact that the company had no authority to do so, as only the federal government can forgive federal student loans. Additionally, the Minnesota AG alleged that the company charged “exorbitant fees” for its actual services, and that those services only enrolled consumers in federal repayment programs, which the Minnesota AG said consumers could have done themselves for free. The Minnesota AG further alleged that the company violated Minnesota state law by charging fees before delivering its services and operating without a required registrations.
Under the consent order, the debt-relief company agreed to pay $50,000 in restitution to customers and cease operations in Minnesota until it registers as a debt-settlement service provider. According to the Minnesota AG’s office, this settlement represents the eleventh time it has shut down a purportedly fraudulent student-loan debt-relief company in Minnesota since 2016.
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