At the FTC’s request, a California court has frozen the assets of a student loan debt relief organization. The FTC claims the company falsely promised to secure forgiveness of consumers’ student loan debt, among other things.
07/01/2024 2:20 P.M.
1.5 minute read
In its first case under the new Impersonation Rule, the Federal Trade Commission froze the assets of a student loan debt relief company, asserting that it “bilked more than $20.3 million from consumers seeking debt relief by pretending to be affiliated with the Department of Education,” according to a press release.
In a legal alert, ACA International member company Barron & Newburger P.C. noted that the defendants—Panda Benefit Services, LLC, and its network of related companies and individuals—are accused of “(1) falsely promising to secure forgiveness of their student loan debt; (2) falsely claiming to be able to obtain for consumers repayment` plans that will lower their monthly payment amounts; (3) claiming to be loan servicers who would take over servicing consumers’ federal student loans; and (4) claiming to ‘work with’ or to be otherwise affiliated with the government, including specifically the U.S. Department of Education.”
At the FTC’s request, the U.S. District Court for the Central District of California entered a temporary restraining order against the defendants on June 24, 2024.
“These defendants promised to lower student loan payments, but then took millions of dollars from consumers and did nothing, leaving them in deeper debt,” said Samuel Levine, director of FTC’s Bureau of Consumer Protection. “The FTC will continue taking decisive action against those who exploit Americans struggling with student debt.”
The FTC’s Impersonation Rule, which went into effect April 1, gives the commission tools to stop scammers who impersonate businesses or government agencies. The tools include directly filing federal court cases to mandate scammers return the money they earned from government or business impersonation scams.
ACA International was part of a coalition of more than 200 trade associations and professional organizations that supported an expedited approval of the final rule from the FTC, ACA previously reported.
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