Minnesota AG Announces Settlement with Student Loan Debt Relief Company

On April 13, 2021, the Minnesota Attorney General Office (Minnesota AG) announced that it reached a settlement with a California-based student-loan debt-relief company resolving alleged violations of Minnesota’s Debt Services Settlement Act, Prevention of Consumer Fraud Act, Minn. Stat. § 325F.69, et seq.,​ and Uniform Deceptive Trade Practices Act, Minn. Stat. § 325D.43, et seq.

The Minnesota AG alleged that the company unlawfully promised consumers student-loan forgiveness and charged illicit initial and monthly fees to consumers for enrollment in otherwise free federal repayment programs.  According to the Minnesota AG, the debt relief company also allegedly collected upfront fees before performing promised services, which is illegal under state law.

Under the settlement, the debt relief company is required to pay $18,190 in restitution and cease operating in the state of Minnesota unless and until the company registers as a debt-settlement provider.  The company is also ordered to pay a stayed $50,000 civil money penalty to the Minnesota AG’s office.