Just about a year ago, we told you about a case the FTC brought against a student loan debt relief firm. The FTC alleged that the operators of Mission Hills Federal, Federal Direct Group, National Secure Processing, and The Student Loan Group bilked borrowers out of millions of dollars. The FTC said the companies lured people with false promises to pay down student loans and lower monthly payments. The FTC also claimed the companies lied about taking over the servicing of the loans, which tricked people into submitting loan payments directly to them. In fact, the defendants diverted borrower payments to themselves.
Today, we have some great news to share: a federal court in California has ruled in our favor. What does that mean? The defendants will be permanently banned from the telemarketing and debt relief businesses. What’s more, the ruling also imposes a $27.6 million judgment. The portion of that amount collected by the FTC may be used to refund people affected by the defendants’ scheme. Stay tuned for more information on possible refunds.
If you or someone you know feels overwhelmed by student loan debt, know this: It’s illegal for companies to charge you for debt relief services before they help you, and some of the companies that promise relief are scams. If you have questions about federal student loans, start with StudentAid.gov/repay. If you have private loans, talk with your loan servicer. For more information, check out ftc.gov/StudentLoans.
Here are a few tips to help avoid debt relief scams.
Learn more about what the FTC is doing to help protect consumers. Sign up for our consumer alerts.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
- We won’t post off-topic comments, repeated identical comments, or comments that include sales pitches or promotions.
- We won’t post comments that include vulgar messages, personal attacks by name, or offensive terms that target specific people or groups.
- We won’t post threats, defamatory statements, or suggestions or encouragement of illegal activity.
- We won’t post comments that include personal information, like Social Security numbers, account numbers, home addresses, and email addresses. To file a detailed report about a scam, go to ReportFraud.ftc.gov.
We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.
In reply to I was one of the individuals by Poor gma