WASHINGTON—The operators of two Florida-based student loan debt relief schemes have been banned from debt relief business as part of agreements settling Federal Trade Commission allegations that they collected illegal upfront fees and falsely promised to help some consumers enroll in government programs that would reduce or forgive their student loan debt.
The settlements with Student Debt Doctor (SDD) and American Student Loan Consolidators (ASLC) are part of Operation Game of Loans, a coordinated federal-state law enforcement initiative targeting deceptive student loan debt relief schemes first announced by the FTC in October 2017.
“People struggling to repay student debt should know that an offer of debt relief with an upfront fee is likely to be a scam, and they should alert the FTC,” said Andrew Smith, director of the agency’s Bureau of Consumer Protection.
Earlier Court Judgements
On October 3, 2017, a federal district court issued a temporary restraining order against the SDD defendants, halting their deceptive student loan debt relief practices and freezing their assets. The court later entered a preliminary injunction that continued the asset freeze, the FTC said.
The settlement with SDD resolves FTC allegations that it illegally collected at least $7 million from consumers struggling to pay student loan debt. The settlement also prohibits the defendants from making misrepresentations related to financial products or services. It includes a partially suspended $13 million judgment and requires the defendants to pay approximately $2.2 million, the agency stated.