REFUND: FTC sending checks to victims of student loan debt relief scam


The Federal Trade Commission (FTC) is sending more than $5.4 million in refunds to thousands of consumers who were victims of student loan debt relief scam.

The refunds were part of a 2018 settlement agreement between the FTC and five student debt relief scam operators who bilked millions of dollars from consumers.

These scammers, who operated their schemes using multiple names (see list below), falsely claimed that consumers who paid an upfront fee of up to $1,000 were qualified or approved for loan forgiveness or reduced monthly payments.  In fact, they operated a service that never provided any relief to consumers.

According to the FTC, student loan debt relief scam victims will receive checks with an average amount of $136.48. The consumer watchdog is sending a total of 39,734 checks, which will expire after 60 days. It is encouraging the recipients of the checks to cash them out before the expiration date.

List of student debt relief scam operators

These entities operated a student loan relief scam and were NOT affiliated with the U.S. Department of Education.  The FTC filed a complaint against them and agreed to settle last year.

  • Alliance Document Preparation
  • LLC; EZ Doc Preps
  • Grads Aid
  • First Document Aid
  • SBS Capital Group, LLC
  • Grads United Discharge
  • SBB Holdings, LLC
  • Allied Doc Prep
  • Post Grad Services;
  • United Legal Center, LLC
  • Post Grad Aid
  • Alumni Aid Assistance
  • United Legal Discharge
  • United Legal Center, Inc.
  • Grads Doc Prep, LLC
  • Academic Aid Center
  • Academic Protection
  •  Academy Doc Prep
  • Academic Discharge

Here are some tips for consumers to avoid student debt relief scams:

The FTC provided the following reminders for consumers to avoid becoming a victim of student debt relief scams:

  • Never pay an up-front fee. It’s illegal for companies to charge you in advance before helping you. If you pay upfront to reduce or get rid of your student loan debt, you might not get any help — or your money back.
  • Only scammers promise fast loan forgiveness. Before they know your situation, scammers might say they can quickly get rid of your loans through a loan forgiveness program. But they can’t.
  • A Department of Education seal doesn’t mean it’s legit. Scammers use official-looking names and logos, and say they have special access to certain federal programs. They don’t.
  • Don’t share your FSA ID with anyone. Scammers could use it to get into your account and take control of your personal information.

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