A fraudulent student loan debt relief operation and its owners have been permanently banned from the debt relief industry and required to turn over all assets to resolve allegations that they misled consumers the Federal Trade Commission said.
“Consumers looking to pay off their student loan debt should not have to worry about being scammed,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to hold fraudsters that pocket Americans’ hard-earned money accountable.”
The FTC alleged Panda Benefit Services(also doing business as Prosperity Benefit Services), its affiliates, and its operators (collectively, defendants):
- targeted consumers burdened with student loan debt and tricked them into paying hundreds to thousands of dollars in illegal fees toward fake student loan forgiveness;
- falsely claimed that consumers who paid for defendants’ program were guaranteed loan forgiveness and that the program would reduce their loan payments;
- pretended to be affiliated with the U.S. Department of Education, telling consumers they would take over servicing of their loans while actually pocketing consumers’ money; and
- swindled more than $16.7 million in unlawful advance fees from students seeking debt relief.
The final orders ban defendants from the debt relief industry. The orders against Select Student Services and Eduardo Martinez and Public Processing Services, Quick Start Services, and Signature Processing Services also ban them from telemarketing. In addition, the orders prohibit the defendants from:
- making any misrepresentations about other products or services;
- using false statements to collect consumers’ financial information; and
- impersonating any other people or government entities
Finally, the order as to Student Services and Martinez impose a monetary judgment of nearly $16.8 million, which, in the case of the stipulated orders, is mostly suspended due to an inability to pay. Those defendants are required to turn over millions in personal and business assets.
If either of those defendants are found to have materially misrepresented their finances, the full amount of the monetary judgment would become immediately due from that defendant.
The FTC has resources on how to avoid student loan debt relief scams at ftc.gov/StudentLoans. Consumers can get assistance with their student loans for free at StudentAid.gov.