FTC Files Proposed Order To Resolve Allegations Of Purportedly Unlawful Student Loan Debt Relief Operation

On May 22, 2025, the FTC filed a proposed stipulated ord​er in the District Court for the Middle District of Florida to resolve allegations ​that several individuals ​and the student loan debt relief companies that they operated engaged in ​lending practices that violated the ​​​FTC Act,​ the Telemarketing Sales Rule, and the Gramm-Leach-Bliley Act.​

In the complaint, filed on July 9, 2024, the FTC alleged that the student loan debt relief providers​ engaged in an unlawful scheme by: (a) misrepresenting to consumers in telephone calls, on their website, ​and in social media posts that the debt relief companies were affiliated with the federal government and/or federal student loan services, (b)​​ promising consumers that they qualified for a fabricated “loan forgiveness program” that was unrelated to any official federal loan repayment program, and where payments pursuant to which were not actually applied to the consumer’s loans, (c) charging consumers improper up-front fees to access the purported debt relief services, (d) deploying fake user testimonials and reviews in marketing materials, and (e) ​making calls to consumers on the national Do Not Call registry.

Pursuant to the proposed order, the debt relief companies and their owner-operators agreed to cease, among other things, marketing or selling any debt relief services or participating in any telemarketing. The order further provides that a judgment in the amount of $7.3 million is to be entered in favor of the FTC, approximately $6.3 million of​ which would be suspended.

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