Scam Ringleaders Ordered to Pay More Than $8 Million to Consumers and Student Loan Borrowers

Consumer Financial Protection Bureau (CFPB)

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) recently announced it finalized an enforcement action against debt-relief payment-processors RAM Payment and Account Management Systems (AMS), as well as AMS’s co-founders, Gregory Winters and Stephen Chaya, for collecting debt-relief fees from consumers, lying to consumers about when the fees would be paid to debt-relief companies, and sending illegal advance fees to debt-relief companies before they were legally allowed to do so. They also failed to return funds to consumers who canceled student-loan debt relief agreements, as required by law. The CFPB is ordering RAM Payment, AMS, Winters, and Chaya to pay more than $11 million in consumer redress and civil money penalties.

“Too often, bad actors take advantage of student loan borrowers and others who are seeking to get out of debt,” said CFPB Director Rohit Chopra. “Our law enforcement action bans the facilitators and their ringleaders for their illegal acts.”

Based in Knoxville, Tennessee, AMS and RAM Payment provided account maintenance and payment-processing services to about 270,000 consumers across the U.S. who were enrolled in debt relief programs. Winters and Chaya co-founded AMS. RAM Payment acquired AMS in 2019. After the acquisition, Winters and Chaya continued to manage AMS and RAM Payment, and they exercised substantial control over the companies’ business practices.

Providers of account-maintenance and payment-processing services to debt-relief companies are supposed to be independent, third-party companies that hold fees until debt-relief companies are entitled to them under the law.

The CFPB’s investigation found that the respondents violated the Telemarketing Sales Rule and the Consumer Financial Protection Act. The respondents substantially assisted student-loan and traditional debt-relief companies in requesting or accepting advance fees for debt-relief services, misrepresented their payment-processing actions to consumers before disbursing fees to student-loan debt-relief companies, and unfairly disbursed unearned fees for student-loan debt-relief services after consumers had unenrolled from or canceled the services. Specifically, the respondents harmed consumers by:

  • Unlawfully collecting, processing, and disbursing fees: The respondents collected fees from consumers and provided those fees to student-loan debt-relief companies before the consumers’ debts had been renegotiated or a payment was made pursuant to a new debt settlement, as required by law. The respondents also disbursed illegal upfront debt-relief fees that were ostensibly for add-on services marketed by debt-relief companies as legal plan memberships. Some debt-relief companies and legal plan providers claimed these legal plan memberships provided consumers with access to lawyers to assist with debt settlement, were included in the cost of debt-relief services, or were essential to effectively settle consumers’ debts.
  • Deceiving consumers about the fees they paid: The respondents led consumers to believe that AMS and RAM Payment would not disburse fees until student-loan debt-relief companies had earned the fees, but they failed to confirm that fees had been earned before paying them to debt relief companies.
  • Paying companies for referrals: The respondents paid illegal commissions to third-party marketing companies connected with student debt-relief companies and traditional debt-relief companies, for a stream of customer referrals, also in violation of rules designed to ensure that account maintenance services are independent.
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Additionally, Winters and Chaya sought to enrich themselves through illegal relationships with an affiliated financing company and debt-relief companies. Winters and Chaya owned a financing company, Account Connect Limited (ACL). For certain debt-relief companies, ACL advanced about 65% of the fees that the companies expected to receive from consumers. ACL recouped these advances from payments consumers made into accounts maintained by AMS and RAM Payment. The respondents deceived consumers by failing to disclose this conflict-of-interest between the respondents and ACL. Instead, the respondents falsely represented that AMS and RAM Payment provided services as independent third-party companies. They also illegally kept money held in consumers’ accounts when consumers canceled or unenrolled from ACL-funded student-loan debt-relief services with companies.

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