Blog Enforcement Watch April 07, 2015

Washington AG Sues Student Loan Debt Adjusting Company for Illegal Fees

On April 7, 2015, the Washington State Attorney General Office announced that it filed suit against a California-based student-loan debt-adjustment company, alleging that the company charged illegal fees in violation of Washington’s Consumer Protection Act and the state’s Debt Adjusting Act. According to the complaint, the company allegedly marketed services to students to assisnt borrowers in applying for federal loan repayment programs, charging upfront fee in excess of the amount authorized by Washington’s Debt Adjustment Act. The company also allegedly failed to notify borrowers of their statutory right to cancel within three days of entering the agreement. The complaint seeks to void all contracts between the company and student borrowers; restitution on behalf of the borrowers; an injunction; statutory penalties; and other relief.