The CFPB launches a student loan debt relief operation


On March 16, the CFPB for follow-up a California student debt relief company, its owner and manager (collectively, the “defendants”) for allegedly charging borrowers over $ 3.5 million in illegal advances. The complaint alleged that between 2015 and 2019, the defendants violated the Telemarketing Selling Rule (TSR) and the CFPA by illegally marketing and enrolling borrowers in the company’s purported debt relief services. The defendants are said to have charged and collected advances from federal student loan borrowers to complete paperwork on their behalf to access free Department of Education debt relief programs. According to the Bureau, the defendants violated the RST by requesting and receiving payment of costs before renegotiating, settling, reducing or changing the terms of at least one debt under an agreement, and before the consumer has made at least one payment under this agreement an agreement. The Bureau also alleged that the defendant owner had formed a California limited liability company (Relief Defendant) and illegally transferred a portion of the funds received from the expense advances into the bank account of the Relief Defendant. The complaint seeks an injunction, as well as restitution and civil fines. The complaint also seeks that the defendant for damages return or compensate consumers for the funds he has received.

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