The Federal Trade Commission has reached a settlement with Student Debt Relief Group, charged with falsely claiming to be affiliated with the Department of Education, charging consumers up to $1,000 in illegal upfront fees to enter them into free government programs, and collecting monthly fees they falsely claimed would be credited toward consumers’ student loans. The FTC’s complaint charges individual Salar Tahour and his companies—Los Angeles-based M&T Financial Group and American Counseling Center Corp., doing business as Student Debt Relief Group, SDRG, Student Loan Relief Counselors, SLRC, StuDebt, and Capital Advocates Group, with violating the FTC Act and the FTC's Telemarketing Sales Rule. According to the FTC’s complaint, the defendants "bilked at least $7.3 million from consumers struggling to repay their student loans" (FTC v M&T Financial Group, FTC File No. 172 3065, Case No. 2:17-cv-06855-ODW-PLA).
Allegations. The FTC alleged that, instead of using fees paid by consumers to enter them into government programs and pay down their loans, "the defendants pocketed consumers’ money and responded to consumer complaints by changing the name of their companies rather than their business practices." Additionally, the FTC alleged that, to prevent consumers from discovering the scam, the defendants cut consumers off from their loan servicers and the Department of Education by instructing consumers to stop all communication with those entities. Furthermore, the defendants are alleged to have obtained consumers’ Social Security numbers and Federal Student Aid IDs and hijacked consumers’ online student loan accounts. Also, the FTC accused the defendants of routinely placing illegal calls to consumers on the National Do Not Call Registry.
Settlement. Under the settlement order, the defendants are permanently banned from engaging in any type of debt relief activities and from making misrepresentations or unsubstantiated claims related to financial or any other products or services. They also are prohibited from engaging in illegal telemarketing practices.
The order includes a monetary judgment of $11,694,347.49, which is the estimated consumer injury caused by the deceptive practices. Once the defendants turn over nearly all of their available assets, totaling more than $2.3 million, the remainder of the judgment would be suspended due to their inability to pay.
The FTC’s press release notes that the settlement with Student Debt Relief Group is part of a coordinated federal-state law enforcement initiative targeting deceptive student loan debt relief scams announced by the FTC in October 2017, called Operation Game of Loans.
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