On August 24, 2017, the Attorney General for the District of Columbia (D.C. AG) announced that his office won a judgment in the D.C. Superior Court against a debt relief provider and its owners. The DC AG alleged that the defendants unlawfully marketed student debt relief services to D.C. consumers. The court found that the company misrepresented its services by suggesting that it was affiliated with the federal government and unlawfully charged upfront fees for its services.
The case was filed by the D.C. Office of the Attorney General (DC OAG) last year, which CFEW reported on here. According to the complaint, the company and its owners violated the D.C. Consumer Protection Procedures Act (CPPA) by deceptively marketing their services and the D.C. Consumer Credit Service Organization Act (CCSOA) by charging illegal advance fees. The complaint alleged that the defendants misled consumers by falsely suggesting that the company was involved in the student loan forgiveness or consolidation approval process and by failing to adequately disclose material facts regarding the loan repayment plans that they offered and sold to consumers. The complaint further alleged that defendants induced consumers over the phone to pay the advanced fees by promising that the student loan debt relief was guaranteed, in violation of the Telemarketing Sales Rule (TSR), 16 C.F.R. § 310.4(a)(5)(i), and the CCSOA, D.C. Code § 28-4603.
The complaint sought a permanent injunction to prevent future violations, restitution for the amounts illegally charged to consumers, costs and civil penalties in an amount up to $1,000 per violation of the CPPA. The case will now proceed to the remedies phase. The debt relief provider has also been sued by the attorneys general of Florida, Kentucky and Washington state, and by the Federal Trade Commission (FTC).