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ARTICLE · 28 MAY 2024

CFPB Shuts Down Debt Relief Provider Over Fraudulent Student Loan Practices

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On May 20, the CFPB settled an enforcement action against a California-based telemarketing firm for practices related to student loan debt relief services.

United StatesFinance and Banking
A.J. Dhaliwal
A.J. Dhaliwal
Mehul Madia
Mehul Madia
Maxwell Earp-Thomas
Maxwell Earp-Thomas
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On May 20, the CFPB settled an enforcement action against a California-based telemarketing firm for practices related to student loan debt relief services. The Bureau has ordered the firm to permanently halt operations and pay a $400,000 civil money penalty, in addition to ordering the recission of all the firm's existing contracts with consumers.

The Bureau's investigation revealed that the firm, which began selling and administering debt relief services in 2016, charged illegal advance fees for student loan debt relief services and misrepresented to consumers that advance fees would go toward paying down their loans. The company engaged lead generators to boost its inbound telemarketing calls through email and internet marketing campaigns.

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