On October 17, 2023, the Washington State Attorney General (AG) announced that over the course of 2023, they had recovered approximately $360,000 in restitution from three out-of-state debt adjusters for alleged predatory student debt adjustments in violation of the Debt Adjustment Act.
The Debt Adjustment Act limits the amount of fees a debt adjuster can charge to $25 dollars in upfront fees and 15% of monthly payments for monthly monitoring fees. The three companies investigated by the AG allegedly charged up to thousands of dollars in upfront fees and monthly fees in excess of the legal limit. Some of the companies also allegedly made several false claims, such as claiming affiliation with the Department of Education, claiming expertise in student loans when no such experience was had, and claiming ability to expedite loan consolidation without any such ability to do so.
The most recent action, occurring in September of this year, resulted in a debt adjuster agreeing to pay $139,591 in restitution to 188 Washington borrowers. The company also agreed to pay $5,409 in costs.
The next action, occurring in March of this year, resulted in a debt adjuster agreeing to pay $174,606 in restitution to 209 Washington borrowers, as well as $7,000 in costs.
The final action, occurring in February of this year, resulted in a debt adjuster agreeing to pay $45,635 in restitution to 98 Washington borrowers, as well as $7,000 in costs.