WASHINGTON, D.C. — Federal regulators have shut down an alleged student loan relief scheme accused of collecting millions of dollars from borrowers through deceptive promises of debt forgiveness.
What This Means for You
- You should not pay upfront fees for student loan relief services
- Scammers may falsely claim ties to federal agencies or loan servicers
- Consumers on the Do Not Call list may still be targeted by illegal calls
The Federal Trade Commission obtained a temporary restraining order against NERD Solutions Inc., ED REF Inc., and their operators, blocking the companies from continuing operations while the case proceeds in federal court.
A temporary restraining order is a court order that immediately stops a company or individual from continuing alleged harmful or illegal activity while a case is under review.
Allegations of Deception
According to the FTC, the defendants posed as representatives of the U.S. Department of Education or legitimate loan servicers and contacted borrowers through unsolicited calls.
The complaint alleges the companies promised student loan forgiveness programs that did not exist, persuading consumers to enroll in paid services.
Regulators said the defendants charged illegal upfront monthly fees of up to $1,400, which is prohibited under federal law governing debt relief services.
Scope of the Scheme
The FTC alleges the operation collected at least $8.8 million from borrowers, many of whom were already facing significant student loan debt.
The complaint also states that the companies contacted thousands of individuals listed on the National Do Not Call Registry, which is designed to protect consumers from unwanted telemarketing calls.
The defendants are accused of violating multiple federal laws, including the FTC Act, the Telemarketing Sales Rule, and rules prohibiting impersonation of government entities.
Enforcement Action
The restraining order, issued April 13 by the U.S. District Court for the Central District of California, halts the defendants’ activities while the case moves forward.
The FTC said it worked with the Ohio Attorney General’s Office during the investigation.
Next Steps
The case will proceed in federal court, where a judge will determine whether the alleged violations occurred and what penalties or restitution may be imposed.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News.