Federal Trade Commission says student loan debt “relief” companies gave consumers relief from financial burdens but failed to deliver on their promises

Is there a family, community, or company that is not affected by the nation’s student loan debt burden, which currently totals approximately $1.75 trillion? Even more distressing is the fact that a large portion of that debt is already in default. The Federal Trade Commission has challenged the conduct of two agencies that allegedly promoted false student loan repayment and forgiveness programs in violation of the FTC Act, the Telemarketing Rules and the Gramm-Leach-Bliley Act. One of the pending complaints is named SL Finance LLC, and the others are named BCO Consulting Services Inc. and SLA Consulting Services, Inc. The lawsuit against SL Finance also accuses them of violating the COVID-19 Consumer Protection Act relief program by falsely representing that its services were part of the COVID-19 pandemic.

The complaint alleges that the defendants obtained millions of dollars through telemarketing promotions that conveyed to consumers that purchasing the company’s services would enroll them in a loan repayment program that would forgive all or part of their student loans. The defendants also claimed that most or all of the funds consumers paid them would be applied toward their balances and that the companies would be held responsible for servicing the consumer loans, the FTC said. SL Finance goes a step further and says their plan is part of the CARES Act or some other federal COVID-19 relief package.Just in case there was any doubt about the sudden offer of student loan debt relief, SL Finance and BCO Consulting Services claims to have ties to the Department of Education.

Having said that, how do the company’s promises stack up to reality? Not so good, according to the Federal Trade Commission. Despite these claims of relief, the FTC said the defendants merely relieved the burden on consumers already trapped in student loan debt, which cost each of them money. Where did all the cash go? into the defendant’s pocket, according to the complaint.

The FTC said the defendants frequently failed to apply for (let alone obtain) legitimate federal repayment programs on behalf of consumers and did not include consumers’ payments toward their loan balances. Furthermore, the defendants are not federal loan servicers. Therefore, despite their representations, they do not take over or purchase consumers’ student loans. Instead, the FTC said, they inserted themselves between borrowers and servicers, even instructing consumers to ignore their current servicers.

Additionally, the indictment alleges that representatives of SL Finance falsely claimed that they were “connected” to the federal government (or, specifically, the Department of Education), that they were “contracted” with the federal government, and even claimed that they were “connected” to the federal government. yes federal government. The lawsuit against BCO Consulting accuses its representatives of claiming to be “collaborating” or “affiliated” with the government (or specifically the Ministry of Education). No matter how the defendant telemarketers phrased their claims, the FTC said any assertion of government relations was flatly false.

The lawsuit alleges that the defendants violated the Federal Trade Commission Act and Telemarketing Sales Rules Misrepresent their purported services and charge upfront fees for debt relief services.this Gramm-Leach-Bliley Act Counts accuse them of using deceptive tactics to obtain consumers’ financial information.Additionally, the complaint against SL Finance alleges that they called the Do-Not-Call Registry number, failed to pay the required Do-Not-Call registration fee, and violated COVID-19 Consumer Protection Act Falsely stating that their services are part of the CARES Act or some other coronavirus-related program.

The complaint against SL Finance LLC named owners Michael Castillo and Christian Castillo. BCO Consulting Services’ lawsuit names owners Gianni Olilang, Brandon Clores, Kishan Bhakta and Allan Radam.

The FTC obtained a temporary restraining order that, among other things, prohibited the defendants from‘ Illegal conduct, appointing a receiver to take over the company, and freezing the defendant’s assets. Even at this early stage, these cases should serve as a strong warning: If companies try to exploit the student loan debt crisis for personal gain, the FTC will take notice. False claims of government relations can also be viewed unfavorably.

If you’re dealing with student loan debt, or if you have a coworker, friend, or family member who’s struggling financially, this is a story that speaks directly to you. You don’t have to pay for assistance managing your student loans. If you have federal student loans, please get studentAid.gov/repay. If your loan is a personal loan, please contact your loan servicer directly. Their job is to help you – free. If you become aware of a scam, please notify the FTC at the following address: reportfraud.ftc.gov.