On March 28, the FTC announced that it had named five additional corporate defendants and two individuals to its ongoing case against student loan servicers, which alleges the servicers and their operators mislead consumers into thinking they were receiving student debt relief and forgiveness.
The original complaint alleges a Nevada-based servicer and its operator falsely represented they were affiliated with the U.S. Department of Education and promised student loan forgiveness. The amended complaint adds seven new defendants alleging they worked with the Nevada-based operator to create a complicated web of entities to prey on consumers with student loan debt.
The FTC is seeking a permanent injunction and monetary relief for consumers. Additionally, a court has already issued a preliminary injunction, with an asset freeze, against the original defendants, which will stay in place throughout the litigation. The preliminary injunction prevents the original defendants from misrepresenting their role in student debt relief or accepting money for student debt relief services.