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FTC, Florida AG take action against alleged student loan debt relief schemes

By Mark Iandolo | May 27, 2016

Law money 09

MIAMI (Legal Newsline) – The Federal Trade Commission (FTC) announced that, in association with the state of Florida, it has taken action against Consumer Assistance Project and Student Aid Center for allegedly running fake student loan debt relief schemes.

“The FTC is not going to stand on the sidelines when it uncovers evidence of fraudsters targeting students,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said. “Consumers should be wary of any company that claims it can eliminate or greatly reduce debt, especially if they ask for money in advance.”

Consumer Assistance Project allegedly charged illegal upfront fees to borrowers. The defendants purportedly told consumers they were eligible for government student loan forgiveness programs that would reduce their debt. The FTC claims that most of these borrowers were unlikely to actually meet the requirements.

Student Aid Center allegedly falsely told consumers they could approve them for loan forgiveness, which the consumers could get after paying upfront monthly fees of typically $199 for five months.

“The Federal Trade Commission has been a steadfast partner in our consumer protection enforcement efforts,” Florida Attorney General Pam Bondi said. “These latest joint actions will help protect Floridians, as well as many across the country, from these companies’ unscrupulous debt relief operations and ensure that those responsible will be held accountable.”

The defendants are charged with violating the FTC Act.

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Organizations in this Story

State of FloridaU.S. Federal Trade Commission Florida Office of the Attorney General