Madigan suing student loan debt repayment companies
CHICAGO (Legal Newsline) - Illinois Attorney General Lisa Madigan filed lawsuits on Monday against two student loan debt repayment companies that allegedly charged large upfront fees for bogus services.
The Chicago-based First American Tax Defense LLC and the Frisco, Texas-based Broadsword Student Advantage allegedly engaged in deceptive marketing practices and illegally charged consumers hundreds of dollars in upfront fees to reduce or eliminate their student debt. The companies allegedly sought to scam victims into paying as much as $1,200 upfront for bogus services or for government services that are already free of charge.
"These companies illegally charge fees for services that student loan borrowers can obtain themselves through government programs at no cost," Madigan said. "My office will be aggressive in cracking down on scam operations that prey on student loan borrowers for profit."
Madigan's lawsuits allege First American and Broadsword Student Advantage advertised a false affiliation with the U.S. Department of Education and an "Obama forgiveness program" that is not an actual government program.
First American and Broadsword Student Advantage allegedly violated the Illinois Consumer Fraud and Deceptive Business Practices Act, the Debt Settlement Consumer Protection Act and the Credit Services Organizations Act.