On September 17, 2024, the California Department of Financial Protection and Innovation (DFPI) announced it had taken enforcement action against three companies issuing two desist and refrain orders and one consent order against the businesses for allegedly charging unlawful fees for student loan debt relief services, in violation of the California Consumer Financial Protection Law (CCFPL), the federal Telemarketing Sales Rule (TSR), the federal Gramm-Leach-Bliley Act, and the Impersonation Rule, 16 C.F.R. Part 461. According to the DFPI, these companies were perpetrating predatory scams and collecting fees without performing any work for borrowers.
Pursuant to the terms of the orders, each company was ordered to cease and desist from collecting advance fees prior to providing any debt relief services, and from engaging in any other unlawful student debt relief practices. All three companies were also ordered to rescind all outstanding contracts with California consumers, issue refunds, and pay penalties totaling $260,000. One company also agreed to pay an additional $85,000 in customer refunds.
This action is a part of DFPI’s ongoing enforcement efforts targeting predatory debt relief companies who violate the CCFPL by engaging in unlawful, unfair, deceptive, or abusive acts or practices. DFPI has taken enforcement actions against several other student loan debt relief companies in the state.
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