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.