Massachusetts AG Settles with For-Profit Education Services Debt Buyer

On July 30, 2020, the Massachusetts Attorney General (Massachusetts AG) announced a settlement with a Nevada-based debt buyer regarding a portfolio of loan debt it purchased from a for-profit education company.

The settlement resolves the Massachusetts AG’s allegations that, between 2010 and 2016, the for-profit education​ company​​ ​misled students by representing the efficacy of its study materials, and that company salespeople would arrange for students to obtain loans to finance the materials through certain credit unions. The credit unions then sold some of these loans to other entities, including debt buyers.

The Massachusetts AG investigated the conduct of the for-profit education​ company and concluded that the company​​ engaged in unfair and deceptive acts in violation of state law. According to the Massachusetts AG, the debt buyer provided prompt assistance and cooperation during that investigation and agreed to enter into an assurance of discontinuance with the state.

​The settlement requires the debt buyer to immediately discharge of approximately $298,000 of loan debt owed by Massachusetts consumers. The debt buyer must also pay an additional $70,600 to the state, which it will then use to provide additional refunds to some borrowers. Finally, the debt buyer must request the removal of any negative information from the credit reports of affected consumers.

​​The Massachusetts AG has previously secured settlements with two of the other credit unions involved, as well as another debt buyer who also purchased a portfolio of loan debt from the for-profit education​ company.