On Monday, October 29, 2018, the Federal Trade Commission (“FTC”) announced that it reached a settlement agreement with an online student loan refinancer relating to charges that the company deceptively advertised inflated figures for more than two years, in violation of the FTC Act, 15 U.S.C. § 45.
According to the complaint, since at least April 2016, the company made false statements about loan refinancing savings in television, print, and internet advertisements, including statements that inflated the actual average savings achieved by borrowers by excluding large categories of consumers. The FTC also alleged that the refinancer misrepresented on its website when consumers would actually pay more under certain refinancing plans.
As part of the proposed settlement with the FTC, the refinancer is prohibited from misrepresenting how much money student loan borrowers have saved or will save from refinancing their loans with the company. The consent agreement will be subject to public comment for 30 days, after which the FTC will decide whether to make the proposed consent order final. Once the settlement is finalized, if the company violates the order, it could face civil penalties.