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The Federal Trade Commission said it is sending thousands of checks totaling more than $822,000 to borrowers who lost money in a student loan debt-relief scam that operated under the name Student Advocates.
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In an Aug. 18 announcement, the FTC said it will send a total of 14,521 checks to borrowers victimized by the scheme. In a complaint filed three years ago, the FTC alleged that the operators of Student Advocates, assisted by Equitable Acceptance Corporation, charged illegal upfront fees that they falsely claimed went toward consumers’ student loans. The defendants then steered customers into high-interest loans to pay the fees off.
The FTC also alleged that the defendants made false promises that their services would permanently lower or eliminate consumers’ student loan payments and debt balances. However, none of the money collected by the defendants was paid toward consumers’ student loans.
Student Advocates has since been banned from providing debt relief services, prohibited from collecting further payments from consumers who purchased their debt relief services and required to pay additional monetary…
