C.D. Cal. Issues Temporary Restraining Order Against Companies Accused of Preying on Students Seeking Debt Relief

On August 21, the FTC announced that the U.S. District Court of Central California issued a temporary restraining order against two companies ​accused of targeting students seeking debt relief and collecting $8.8 million in illegal advanced fees in exchange for student loan debt relief services that did not exist.

​In its complaint, the FTC accused the two defendant companies of falsely promising to lower or eliminate students’ loan payments, pretending to be affiliated with the U.S. Department of Education, and convincing students to stop communicating with their federal loan servicers. The FTC has alleged this activity violates Section 5 of the Federal Trade Commission Act, the Telemarketing Sales Rule, and the Gramm-Leach-Bliley Act.

The complaint seeks preliminary and permanent injunctions as well as an unspecified award of monetary relief.