Class action filed against KeyBank over student loans
OAKLAND, Calif. (Legal Newsline)-A group of students in California say they were ripped off by a bank that teamed up with bogus vocational schools to leave students deep in debt, according a lawsuit filed against KeyBank USA.
KeyBank Education Resources and Great Lakes Educational Loan Services allegedly sought to defraud students at sham vocational schools by offering loans, and when the schools' Ponzi schemes collapse, the students are left in debt and have no new job skills, according to a class action lawsuit filed this week in Alameda County Court.
The lawsuit, filed on behalf of California students who enrolled in Silver State Helicopters vocational school, accuses Cleveland-based KeyBank of predatory lending and enabling fraud to be perpetrated.
The plaintiffs say, "The Bank, in complicity with the sham schools, has preyed on unsuspecting California resident students."
The complaint claims that tuition and lending scams at unlicensed and unregulated trade schools have become common in recent years.
"Their growth has been fueled by unscrupulous lenders that have willingly and irresponsibly 'partnered' with these sham operations to provide expensive private loans to the high-risk students these schools tend to attract," the complaint says.
The lawsuit charges that KeyBank USA partners with the Silver State Helicopters vocational school as the school's preferred lender "and followed its usual script from which it has reaped millions of dollars over the years," the complaint said.
"Like KeyBank's previous failed vocation school 'partners', SSH was unregulated and unaccredited and, when its Ponzi scheme collapsed, SSH filed bankruptcy filed bankruptcy, leaving its students with nothing but KayBank's threats to enforce the loans," the complaint reads.
The lawsuit claims the defendants deliberately based themselves in Ohio because state laws there "exempt Ohio-domiciled banks from that state's consumer protection laws."
The plaintiffs are represented by Andrew August of the Pinnacle Law Group of San Francisco.
From Legal Newsline: Reach reporter Chris Rizo by e-mail at email@example.com.