FTC Cracks Down on Student Debt Scammers

October 16, 2017

The Federal Trade Commission and a group of states last week announced a coordinated law-enforcement action against deceptive student loan debt relief scams. The crackdown so far has featured new cases and a judgment against scammers who allegedly used deception and false promises to reel in more than $95 million in illegal fees in recent years. In some cases, the operations pretended to be affiliated with the government.

For example, the FTC said the Los Angeles-based A1 DocPrep took in at least $6 million through unlawful student loan debt relief and mortgage assistance schemes. The company claimed to be affiliated with the U.S. Department of Education, and promised to reduce borrowers' monthly payments or to forgive their loans.

“Winter is coming for debt relief scams that prey on hardworking Americans struggling to pay back their student loans,” Maureen K. Ohlhausen, the FTC's acting chair, said in a written statement. “The FTC is proud to work with state partners to protect consumers from these scams, help them learn how to spot a scam and let them know where to go for legitimate help.”

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