By Katalina M. Bianco, J.D.
Former Consumer Financial Protection Bureau Assistant Director & Student Loan Ombudsman Rohit Chopra alerted Google management that student debt relief scammers may be using the company’s search products to target student loan borrowers. Shortly after contacting Google, Chopra left the CFPB and signed on with the Center for American Progress, thus the "former" added to his recently-held title as Student Loan Ombudsman.
Representing the bureau, Chopra told Google that it is concerned that “unscrupulous companies may be using aggressive advertising through search products to lure distressed borrowers.” In a letter to Susan Molinari, Google Vice President, Americas Public Policy and Government Relations, Chopra explained the student loan debt situation, stating that a “substantial portion” of the more than 40 million Americans owing more than $1.2 trillion in debt are “in distress.” The CFPB estimates that more than 8 million borrowers are in default on a federal or private student loan.
The CFPB is concerned that federal student loan borrowers are “left in the dark” by loan servicers that do not advise them of their options. Borrowers with federal student loans are able to avoid or get out of default through various income-driven repayment and rehabilitation plans, Chopra said.
Increase in illegal practices. Chopra wrote that the bureau has seen an increase in the number of companies that charge large upfront fees to help borrowers enroll in a plan that can be done for free. He noted that federal and state law enforcement has taken action to stop “the illegal and harmful practices of these companies,” and the CFPB has warned consumers about them.
Google trend analysis. In his letter, Chopra told Molinari that the CFPB is aware that Google has policies in place to protect consumers against misrepresentations in advertisements, but there may be companies that do not meet Google’s requirements. The CFPB’s analysis of Google Trends data suggests that struggling borrowers are indeed searching for help using keywords such as “student loan default,” “student loan forgiveness,” and “Obama student loan relief.”
This process “bears a close resemblance” to what happened during the foreclosure crisis, Chopra wrote. Borrowers were given conflicting information about their options and found scammers who made false promises on loan modifications in exchange for upfront fees. In 2011, Google helped to stop these scammers through its cooperation with the Office of the Special Inspector General for the Troubled Asset Relief Program. Now, the bureau is asking for help in stopping scammers from preying on student borrowers in trouble.
Work with authorities. Chopra urged Google to work with federal and state agencies to ensure that the company’s search products are not being used by individuals and companies “seeking to prey on the most vulnerable student loan borrowers by implying an affiliation with the federal government.” He suggested that Google could give greater value to its users and help shut down scammers if the company would closely monitor advertising on key search terms and help drive traffic toward unbiased sources of information.
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