FTC Cracks Down on a Pair of Student Loan Debt Relief Schemes

By Maria Carrasco, NASFAA Staff Reporter

The Federal Trade Commission (FTC) this week, in a pair of actions, announced that they were cracking down on student loan debt relief schemes that sought to take advantage of consumers by promising deceptive loan forgiveness services.

On Monday, the FTC announced that it filed a complaint against Express Enrollment LLC and Intercontinental Solutions LLC, two California-based companies, with “preying on students seeking debt relief” and collecting “millions of dollars in illegal junk fees.” Specifically, the FTC alleged the companies falsely promised to lower or eliminate students’ loan payments, pretended to be affiliated with the Department of Education (ED), and convinced students to stop communicating with their federal student loan servicers. 

Additionally, the FTC alleged that the two companies told borrowers that they must pay fees for services that are available for free through ED, such as President Joe Biden’s student loan debt relief plan, which would have forgiven up to $20,000 in federal student loans. For example, one borrower said they were charged a $375 processing fee for Biden’s student loan forgiveness plan. 

“During a period of uncertainty for borrowers saddled with student loan debt, these defendants bilked consumers out of millions of dollars with junk fees and phony promises of loan forgiveness and lower monthly payments,” Samuel Levine, director of FTC’s Bureau of Consumer Protection, said in a statement. “We are pleased that the court shut down this operation and froze its assets, and we will continue the agency’s ongoing efforts to pursue scammers that target the tens of millions of Americans with student loan debt.”

The two companies also illegally obtained borrowers’ bank account, debit card, or credit card information through misrepresentation and collected hundreds of dollars in unlawful advance fees, the FTC alleged. The FTC noted in its press release that after filing this complaint, a federal court temporarily halted the operations and froze the assets of Apex Processing Center — which did work with Intercontinental Solutions LLC. 

On Tuesday, the FTC and the Department of Justice (DOJ) announced that they would refund over $9 million to borrowers who lost money to Ameritech Financial, a separate student loan debt relief scheme operated by Brandon Frere, who was convicted of criminal charges in connection with the scheme in 2020. 

In 2018, the FTC filed a complaint against Ameritech Financial for pretending to be affiliated with ED, charging up to $800 in illegal up-front fees, and falsely telling people that their $49-$99 monthly membership fees were going toward their student loan balance. In July 2020, a U.S. district court judge sentenced Frere to 42 months in prison and ordered him to forfeit assets worth over $8.9 million, according to the FTC. 

The $9 million refunds will be sent with the available funds from the FTC and DOJ settlements. The FTC said they will send these payments to 22,562 borrowers, with most borrowers receiving a check in the mail. Those borrowers, per FTC guidance, should cash in their checks within 90 days. For those without an address on file, they will receive a PayPal payment. 

Borrowers who have questions about their payment should contact the refund administrator, Rust Consulting, Inc., at 1-833-579-3126 or visit the FTC website


Publication Date: 8/25/2023

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