Washington, D.C. – Today the Consumer Financial Protection Bureau (CFPB) took action against the owner of a student-loan debt relief company for allegedly withdrawing hundreds of thousands of dollars from student borrowers’ bank accounts, without authorization. The CFPB alleges that Frank Gebase, Jr. controlled a company that took the borrowers’ money after obtaining their names and account information from a previous student-loan debt-relief scammer that the CFPB shut down. The CFPB’s proposed settlement, if entered by the court, would ban Gebase from the debt-relief industry and order him to pay a penalty.
“Frank Gebase brazenly rebooted a student debt-relief scam the CFPB shut down over six years ago,” said CFPB Director Rohit Chopra. “When student loan servicers don’t provide clear and accurate information to borrowers, it sets the stage for scammers to swoop in.”
On March 30, 2016, the CFPB ordered Student Aid Institute to shut down its debt-relief operations and rescind all of its consumer agreements. That order resolved the CFPB’s findings that Student Aid Institute violated federal consumer financial protection law, including by charging unlawful upfront fees for student loan debt-relief services and making false promises to borrowers about possible savings through reduced payments and loan forgiveness. Gebase had leased office space to Student Aid Institute, and he was a longtime associate of its principal. In 2016, just prior…
