On December 9, the FTC announced it secured a preliminary injunction against a company accused of deceptive practices in the student loan debt relief sector. The complaint, filed in U.S. District Court for the District of Nevada, alleged the company exploited consumers’ anxieties over the resumption of student loan payments after a pandemic-related pause.
The agency claimed the company falsely promised consumers reduced loan payments and forgiveness, misrepresented itself as being affiliated with the Department of Education, and collected illegal advance fees. The FTC also alleged the company used deceptive mailers and telemarketing calls to lure consumers into paying for services that provided little to no benefit. The company was accused of misleading consumers into believing it would apply their payments to their student loans. The FTC asserted violations of Section 5(a) of the FTC Act, the Telemarketing Sales Rule, and the GLBA.
The preliminary injunction ordered the company to cease misrepresenting its services, prohibited it from charging advance fees, and imposed an asset freeze. The FTC now seeks a permanent injunction, monetary relief, and other measures to halt the company’s alleged violations.
