WASHINGTON—The operators of a student loan debt relief scheme have been banned from providing debt relief services and have agreed to settle Federal Trade Commission charges that they collected illegal upfront fees and falsely promised to lower or even eliminate consumers’ loan payments or balances, the FTC reported.
In its 2019 complaint the FTC alleged Student Advocates Team and other defendants charged illegal upfront fees that they led consumers to believe went towards consumers’ student loans, and falsely promised that their services would permanently lower or even eliminate consumers’ loan payments or balances.
The defendants also signed customers up for high-interest loans to pay the fees without making required disclosures.
The settlement resolves FTC litigation against the remaining defendants in the case: Student Advocates Team, LLC, Progress Advocates Group, LLC (also doing business as Student Advocates), Student Advocates Group, LLC, Assurance Solutions Services, LLC and individual defendant Bradley Jason Hunt and individual defendant Sean Quincy Lucero. Equitable Acceptance Corporation settled the charges against it in September 2019.
Monetary Penalty
The orders ban the settling defendants from providing debt relief services, prohibits them from violating the Telemarketing Sales Rule, and includes a monetary judgment against certain defendants of more than $24.5 million, which is partially suspended due to an inability to pay.
The defendants will be required to pay $11,500, which will be used for consumer redress. The defendants are also prohibited from collecting any further payments from the consumers who purchased their debt relief services.