The Consumer Financial Protection Bureau (CFPB) has taken action to shut down two student loan debt relief scammers by filing lawsuits against them. One is College Education Services, and the other is Student Loan Processing U.S. The two companies, operating separately, have been illegally marketing student debt relief services. In addition to the filing of these two suits, the CFPB has issued warnings to student loan borrowers to be wary of paying high fees for free student loan benefits. Because student loan debt has become such a huge issue burdening Americans, many scammers are taking advantage of consumers' struggles to make a profit through illegal and unethical means.
College Education Services
College Education Services was a company based out of Tampa, Florida. Its owner, Marcia Elena Vargas, and employee, Frank Liz, falsely marketed lower payments and debt relief services to student loan borrowers who were experiencing default. The company would heavily advertise via the internet in the form of ads. Despite charging millions of dollars in advance fees, it had failed to provide any form of relief towards its consumers. Charging advanced fees before performing any work in debt relief is illegal, but the company charged anywhere from $195.00 to $2,500.00 in fees to be paid before any work had been done. The company also exacerbated the problems of their consumers instead of providing relief. For some consumers who qualified for loan consolidation, the company would instead increase their monthly payments. Additionally, the company failed to deliver on many of its promises including relief from default or garnishment.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is authorized to take necessary and appropriate actions against companies engaging in unfair, deceptive, or abusive practices. The CFPB has filed a request with the federal district court to enter a consent order that would permanently ban College Education Services, Liz, and Vargas from engaging in any debt relief business in the future. The proposed order also requests that Education Services, Vargas, and Liz would pay a $25,000 civil penalty.
Student Loan Processing US
Student Loan Processing US is a false name that Irvine Web Works, Inc. operates under. It is headquartered in Laguna Nigel, California, and it has an office in Dallas, Texas. Since 2011, the company and its owner, James Krause, has been falsely marketing and advertising services that would assist borrowers in applying for federal loan repayment programs. It also targets vulnerable borrowers through massive marketing and advertising efforts via the internet.
Like many scammers in this industry, the company chose to falsely represent a connection and affiliation with the U.S. Department of Education. It offered consultation service to consumers, and it used a fake logo that resembled a government seal. It created an elaborate ruse that falsely induced consumers into believing that the company was actually offering legitimate services in association with the government. It even cited federal law that prohibited mail tampering to create an impression that the materials they sent were endorsed by the government.
Similar to College Education Services, it also charged substantial advanced fees or enrollment fees before they began any work. It was also very unclear about the type of fees they were charging and why they were charging them. They muddled their own service terms and conditions to con more money out of consumers.
In this case, the CFPB is seeking to stop the illegal activities and to seek restitution to consumers harmed by the company's practices. Besides requesting the court to grant the return of lost money to the consumers, the CFPB also seeks to impose a fine on the company and its owner.
The CFPB wants to warn borrowers who are experiencing difficulties repaying their loans to seek help from their loan servicers and not private debt relief companies who are promising services that seem too good to be true, because they often are. Service from third-party debt relief providers often end up giving borrowers more problems, driving them further into debt.
This is consistent with our beliefs that consumers should always contact a consumer debt attorney instead of dealing with so called "debt relief agencies." To speak to a New York City debt relief lawyer from our firm for free, contact us today.