The Federal Trade Commission, along with 11 states and the District of Columbia, today announced “Operation Game of Loans,” the first coordinated federal-state law enforcement initiative targeting deceptive student loan debt relief scams. This nationwide crackdown encompasses 36 actions by the FTC and state attorneys general against scammers alleged to have used deception and false promises of relief to take more than $95 million in illegal upfront fees from American consumers over a number of years.
Student loan debt affects more than 42 million Americans and, with outstanding balances of more than $1.4 trillion, student loans are the second largest segment of U.S. debt, after mortgages.
Operation Game of Loans includes seven FTC actions: five new cases, one new judgment in favor of the FTC, and a preliminary injunction entered in a case filed earlier this year. The agency alleges that the defendants in these actions charged consumers illegal upfront fees, falsely promised to help reduce or forgive student loan debt burdens, and pretended to be affiliated with the government or loan servicers, in violation of the FTC’s Telemarketing Sales Rule and the FTC Act. Operation Game of Loans also includes law enforcement actions by Colorado (link sends e-mail), Florida (link sends e-mail), Illinois (link sends e-mail), Kansas (link sends e-mail), Maryland (link sends e-mail), North Carolina (link sends e-mail), North Dakota (link sends e-mail), Oregon (link sends e-mail), Pennsylvania (link sends e-mail), Texas (link sends e-mail), Washington (link sends e-mail), and the District of Columbia (link sends e-mail).
36 FTC and State enforcement actions, 11 States and the District of Columbia, Scammers collected over $95 million in illegal fees.
“Winter is coming for debt relief scams that prey on hardworking Americans struggling to pay back their student loans,” said Maureen K. Ohlhausen, FTC Acting Chairman. “The FTC is proud to work with state partners to protect consumers from these scams, help them learn how to spot a scam, and let them know where to go for legitimate help.”
In addition to its state partners, the FTC has been working closely with the U.S. Department of Education’s office of Federal Student Aid to raise awareness about student loan debt relief schemes, and ensure that borrowers know to visit StudentAid.gov/repay for information about existing repayment and forgiveness programs available to them at no cost.
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