WASHINGTON—The Federal Trade Commission is sending 14,521 checks totaling more than $822,000 to borrowers who lost money to a student loan debt-relief scheme that operated under the name Student Advocates.
In September 2019, the FTC filed a complaint against a student loan debt-relief scheme and the financing company that assisted them. The FTC alleged that the operators of Student Advocates, assisted by Equitable Acceptance Corporation, charged illegal upfront fees that the company falsely claimed went toward consumers’ student loans. The defendants steered customers into high-interest loans to pay these fees, according to the government.
The FTC further alleged that the defendants made false promises that their services would permanently lower or even eliminate consumers’ student loan payments and debt balances. None of the money collected by the defendants was paid toward consumers’ student loans, the FTC said.
Order Banned Company
At the time the FTC filed its complaint, it also announced a stipulated final order with Equitable Acceptance Corporation that banned the company from assisting debt-relief services and violating the Telemarketing Sales Rule. The order also prohibited Equitable Acceptance from collecting any further payments from consumers who purchased these debt-relief services and required the company to pay monetary relief, the FTC said.
After more than a year of litigation, in May 2021, the FTC announced a stipulated final order with Student Advocates that banned the company from providing debt relief service, prohibited them from collecting further payments from consumers who purchased their debt relief services, and required them to pay additional monetary relief.
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