FTC Helps End $10 Million Student Loan Debt Relief Scheme That Deceived Many Borrowers | Global News Avenue

Federal Trade Commission (Federal Trade Commission) helped end a $10 million student loan debt relief program that allegedly collected illegal advances and fraudulently claimed it was affiliated with the U.S. Department of Education.

The agency said that since at least January 2023, Superior Servicing violated the FTC’s impersonation rule by making false claims to borrowers through telemarketing calls and personalized emails.

A federal court recently issued a temporary restraining order against the Nevada-based company and froze its assets following an FTC lawsuit in 2023.

How are student loan borrowers being defrauded?

Superior Servicing allegedly falsely claimed that customers could receive benefits such as loan consolidation, lower interest rates, reduced monthly payments or loan forgiveness.

The FTC said Superior Servicing operators charged borrowers as much as $899 for down payments and in addition, borrowers were falsely told that their monthly payments would be included in their total student loan debt.

The company allegedly falsely claimed to be working with or affiliated with the Department of Education and in some cases told borrowers they could stop payments to their existing loan servicers.

“Defendants promised consumers student debt relief but actually gave them nothing, keeping more than $10 million for themselves and leaving consumers in debt,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. Deeper.”