FTC Files Proposed Orders to Ban Student Debt Relief Companies for Illegal Junk Fees and Upfront Fees

On February 6, 2024, the Federal Trade Commission (“FTC”) filed two proposed stipulated orders with a California federal court to permanently ban student debt relief companies as well as their individual operators. The proposed orders include more than $7 million dollars in monetary relief but must be approved by a judge before they are enforceable. 

According to the FTC’s August 2023 complaint on which the proposed orders are based, the defendants participated in deceptive acts or practices in violation of Section 5(a) of the FTC Act, multiple provisions of the Telemarketing Sales Rule (“TSR”), and Section 521 of the GLB Act, all in connection with the defendants’ marketing and sale of student loan debt relief services. Specifically, in the complaint, the FTC alleged that as far back as 2019, the defendants – Express Enrollment LLC (d/b/a SLFD Processing), Intercontinental Solutions LLC (d/b/a Apex Doc Processing LLC), and their operators – falsely claimed to be affiliated with the U.S. Department of Education and used “Biden Loan Forgiveness” or a similar name in marketing to consumers. According to the FTC, consumers interpreted the defendants’ affiliation claims as referring to the Biden-Harris Administration’s Student Loan Debt Relief Plan, which “lured” students into purchasing their purported student loan debt relief services. 

The complaint also stated that the defendants used the “Biden Loan Forgiveness” affiliation to illegally obtain consumers’ banking and financial information, and typically collected hundreds of dollars in unlawful advance fees in violation of the TSR. The student debt relief operators, according to the FTC, collected more than $8 million in junk fees in exchange for student loan debt relief services that were not provided.

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