I blogged last week about student loans
CFPB nails student loan scams
and the Consumer? Finance?Protection
And, again today!
CFPB Shuts Down Student Loan Scam
from jd supra story:
. . . California-based Student Aid Institute and CEO Steven Lamont charged borrowers a fee to participate in the federal student loan programs, the CFPB said, marketing itself to education loan borrowers and misrepresenting that the fees were required to participate in the program, reaping “a lot of dollars” in advance fees from consumers.
The various government education loan repayment programs for the sundry government education loan programs are a minefield in which to navigate.? Lots of people need help with that task.
But, it can be one thing to charge people for assisting them during this process, and another, to say that they MUST pay you to avail themselves of the government student loan repayment program.
Which is what the scammers do. They shout about “secret government programs” and shortcuts and helping you save tens of thousands of dollars and how many ecstatic former customers they may have.
LIES!? Actually, damned lies.
Same scam operates by companies purporting to have “the secret the credit card companies don’t would like you to know!” and the “new government program that allows you to settle your debt for pennies about the dollar!”
Those scams were effectively scuttled, as legal anyway, by legislation that permits them to charge a fee only AFTER they successfully negotiate a deal for you.
How Much Did This Education loan Scam Make?
From the associated with article:
In addition to misrepresenting that the fees were required, charging the fees violated the Consumer Financial Protection Act, which necessitates that at least one debt be renegotiated, settled, or reduced before a cost can be collected for debt relief services, the Bureau added. Finding comfort December 1, 2012, Student Aid typically collected an upfront fee of $395 or $495, including a $39-per-month maintenance fee. During the relevant timeframe, Student Aid brought in approximately $3.6 000 0000, causing harm to about 4,300 consumers, the Bureau said.
It it sounds too good to be true, it can be.
You can contact me with your education loan questions.