FTC Acts to Stop Debt Relief Scheme Targeting Spanish-Speaking Student Loan Borrowers
FTC Acts to Stop Debt Relief Scheme Targeting Spanish-Speaking Student Loan Borrowers
The Federal Trade Commission has stopped the operators of a scheme that it says tricked financially strapped consumers seeking student loan relief into paying hundreds of dollars in junk fees. The operators often targeted Spanish-speaking consumers in Puerto Rico, pretended to be affiliated with the Department of Education and its loan servicers, and made false promises of low, permanently fixed monthly payments and loan forgiveness.
A federal court temporarily halted the scheme and froze its assets at the request of the FTC, which seeks to end the unlawful practices and secure redress for the thousands of consumers who have been harmed.
“By pretending to be affiliated with the Department of Education and misrepresenting features of its free income-driven loan repayment programs, these scammers bilked millions from the consumers these programs were designed to help,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are pleased that the court preliminarily shut down this predatory operation and froze its assets, and we will continue our efforts to crack down on junk fees, unwanted calls, and exploitation of consumers struggling with student loan debt.”
According to the FTC’s complaint, since at least April 2019, Florida-based Start Connecting LLC and Colombia-based Start Connecting SAS (collectively doing business as USA Student Debt Relief (USASDR) and their owners and operators Douglas Goodman, Doris Gallon-Goodman, and Juan Rojas have enticed consumers by falsely suggesting an affiliation with the government or its student loan servicers. USASDR also falsely promised to enroll consumers in programs that guarantee permanent low, fixed monthly payments—as low as $9 per month—followed by generous lump-sum loan forgiveness of the remaining balance. In exchange for enrollment, the operators have charged consumers illegal advance fees of several hundred dollars followed by monthly fees of as much as $29. Although USASDR claimed it would apply consumers’ monthly payments to their loan balances, in reality USASDR’s operators pocketed consumers’ hard-earned money and offshored much of the funds to Colombia.
The complaint also notes…
