CFPB Enters Consent Order Over Student Loan Debt Relief Services

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Piggy Bank with a Graduation CapOn May 20, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a California-based telemarketer that offered student loan debt relief services resolving allegations that the company charged illegal advance fees and misled student loan borrowers.  This telemarketer allegedly claimed to be affiliated with the Department of Education and used lead generators for marketing, selling, and administering student loan debt relief services.  The CFPB alleged their practices harmed nearly 6,000 consumers to the tune of nearly $975,000 since the company began offering student loan debt relief services in 2016.​

Specifically, the CFPB alleged the company violated the Telemarketing Sales Rule by charging consumers fees before renegotiating, settling, reducing, or otherwise altering the terms of the consumer’s debts. The CFPB also alleged that the company misrepresented material aspects of their debt relief services, namely misrepresenting to consumers that the fees for its debt relief services would be applied towards paying off the consumers’ student loans and falsely representing to consumers that it would help consumers consolidate their loans or achieve loan forgiveness. ​​

Under the terms of the consent order, the company agreed to permanently cease all operations in the student loan debt relief space and to pay a $400,000 fine to the CFPB’s victim relief fund.  Further, the order rescinds all of the company’s existing agreements with consumers for student loan debt relief services.