Finance Company to Pay $440,000, Banned from Selling Student Loan Services in Massachusetts

On August 7, 2019, the Attorney General for the Commonwealth of Massachusetts (“Massachusetts AG”) announced that it filed a complaint and consent judgment in Suffolk County Superior Court.  The consent judgment bans a purportedly unlicensed finance company from collecting on any active student loan debt relief accounts in Massachusetts, and requires the company to pay $340,000 to repair the credit of approximately 600 borrowers affected within the state, as well as $100,000 in restitution to the Commonwealth.

The complaint alleged violations of the Massachusetts Consumer Protection Act, claiming that the company provided high-interest loans to student borrowers and charged excessive fees for “documentation preparation services​” that merely involved the preparation and submittal of forms for the borrowers.  The Massachusetts AG further alleged that the company misrepresented its loans as “revolving credit plans” when they were actually “closed-end” loans, and that the company failed to disclose the true cost and terms of these loans, in violation of the Massachusetts Truth in Lending Act.

This is the latest of a series of enforcement actions Attorney General Healey has brought and settled with student loan “debt relief” companies, previously covered here, here, and here.