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FTC shuts down student loan debt relief scheme

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It’s a staggering number. More than 42 million Americans owe a total of nearly $1.5 trillion in student loan debt. It’s no wonder people look for help. But not all help is legit. Scammers are targeting borrowers with student loan debt relief schemes that can actually make things worse.

In a new case announced today, the FTC alleges the operators of Mission Hills Federal and Federal Direct Group bilked borrowers out of more than $23 million. The FTC says these companies lured people with false promises to pay down student loans and lower monthly payments. According to the FTC, the companies also lied about taking over the servicing of the loans, which tricked people into submitting loan payments directly to them. In fact, the defendants diverted borrower payments to themselves.

What’s more, many of these borrowers went months, sometimes years, before learning their student loans weren’t being repaid. Why? The FTC says the defendants made people give their federal student aid IDs, or other personal information, to enroll in the debt relief program. They used that information to change borrowers’ contact information on U.S. Department of Education websites, which limited the borrowers’ contact with their federal loan servicers.

If you or someone you know feels overwhelmed by student loan debt, know this: There’s nothing a company can do for you that you can’t do yourself for free. If you have federal student loans, start with StudentAid.gov/repay. If you have private loans, talk with your loan servicer. For more information, check out ftc.gov/StudentLoans.

Here are a few tips to help avoid debt relief scams.

Student Loand Debt? Call Now

Spotted a scam? Let us know about it at ftc.gov/complaint.

Tagged with: debt, loan, scam, student
Blog Topics: 
Money & Credit

Comments

Thank-you for this good news!! Keep it up and in my opinion getting rid of these greedy, poisonous, horrible, blood-sucking businesses and those disgusting, degenerate, poisonous and definitely blood-sucking degenerates who prayed on student loan people.

Bravo FTC!!!!! Bravo!!!!!

Congratulation FTC.

We received two of these calls: July 10 and two weeks prior. We paid off our student loans in full by 1975. Don't know why we are on the call list.

I never had a student loan and I received a call. The guy was difficult to understand, never even confirmed that I had a student loan.

Im using "FedLoan Servicing", I hope they are a legitimate company?

The companies the FTC sued in this case are Mission Hills Federal and Federal Direct Group. You can read more about the case in the press release.

If you have federal student loans, you can use free information from the US Department of Education at www.StudentAid.gov/Repay to learn about repayment options.

They're not. I mean they could be. But no, I called the Department of Education because they put my student loan back on active while it was under investigation, but the Department of Education said that they did it without the Department of Educations permission and they had been receiving A LOT of calls from people stating that FedLoan Servicing had been renewing peoples payments without authorization the past month.
Also, I have emails with them of them lying and blatantly trying to frame me. I have a conversation about my loan payment and my dispute that they were directing to the wrong sources of which blatantly would make the average person give up on trying to defend unlawful payments, their response almost every time I talked to them was that their contract is to make us pay the loan under any circumstances and that no matter the situation that they are to assure that the loan gets paid by. They have clearly made that obvious with how they have reacted.
I had 2 loans for 1 school, TuitionOptions and FedLoan, I told TuitionOptions about my situation in minor detail because I sent them a message to ask them a legal question about owing the loan/payments, they immediately closed my loan, saying I didn't owe it, but I think TuitionOptions was a Private Loan. FedLoan though misdirected me, lied to me, basically blackmailed me, and like with many others as The Department of Education told me, unlawfully reinstated peoples loans.

I was one of these people that fell for this. 4 years later, the company I went through is under investigation. I recently called my student loan provider and spoke to them about the situation. Although they cannot do anything, I did find out that this company got me for 17,000. Instead of paying my loans down, I now have more debt. Be careful people, I didn't know better at the time.

Sorry, FTC, you missed someone! I got a call July 15, around suppertime, and guess what? I paid off my student loans *years* ago and have records to prove it. Yet this person (a live one) said a name and 1-888 return call number and said there was a 'letter' to delay action for, gee, less than a day more. No written notices, no other calls, nothing on my credit report, and did I mention my loans were paid off years ago?

Louisiana number, mobile phone. Just in case this one slipped the net.

I was told that I charged 42,000 dollars to a credit card.I have never had card with a limit that high!!

Just got a scam robo-call today. First, it was a recording, second, I PAID my student loans off over 30 years ago and third, my son didn't take out any loans.
(856) 777-7192

I have student loans on my credit report,and I have never taken a loan out in my life..what do I do_

July 15th and 17th, and I am still receiving these calls. SAME lady everytime but goes by 2 different names of Diana Nelson and Barbara Harris. Same MO, no name but they want to give me refinance options for my loan. Caller ID and call back numbers are always different. Today's call from 435-465-9453 with a call back number of 866-855-3443. Other numbers noted are 866-855-3443, 866-262-6116, 866-456-9828, 866-472-9458. Yes, I will also file an online complaint.

I have received at least 6 calls from this person . Just had another
one 5 minutes ago.

Do you know anything about Regional Accounting Center they just had my sister in law sing all kind of forms and setup a payment plan for 240 months. Totaling 6k+ for 30k of loans.

Been plagued by these calls for way too long! TYTYTYTYTYTYTY!!!!!

MY SISTER IN LAW WORKED FOR ON OF THIS COMPANY IN IRVINE IT JUST HAPPEND ABOUT TWO WEEKS AGO SHE DIDNT EVEN KNOW THEY WERE DOING THAT SHE NEVER GOT PAID SHE HAD JUST STARTED THE JOB PLEASE HELP HOW CAN SEE GO ABOUT WAGES SHE NEVER GOT IS THERE A LAW SUITE FROM THE EE THAT WERE WORKING FOR THE COMPANY SHE CAN JOIN

This is the scam call I received today. I almost fell for it because I am enrolled in a Loan Forgiveness program. I called back and “Tiffany “ answered the phone with the company name “Mentor Servicing”. I’ve looked the number up on here and found identical calls other people have received, even with the same reference number. BEWARE!
Here is the voicemail transcription,
“ Hello this is Becky with the student loan servicing approval department I'm contacting you today regarding your federal student loans eligibility for the forgiveness program it is important that we speak to you at your earliest convenience you can reach us at 855-512-3778 again that's 855-512-3778 please be sure to mention reference number 01455 thank you…”

Just got this call July 23, 2019. Last one was back in February. Same 'Virginia Davis, reference # 060008' both times. Guess the FTC missed some.

Received a call from Virginia Davis saying options have changed for repaying Federal Student Loans. Left a number to call her back 866-789-1441 Ref# 060008. Asks for nonespecifically & never says where she's calling from.

Students Counseling Center should be next on the FTC list.

Received a call/voicemail TODAY.

Received a call/voicemail TODAY from 866-789-1441 Virginia Davis. Ref #060008. I've never had any student loans.

Another company or the same company is at it again.
Received call from Virginia Davis (866) 789-1441 asking me to return her call using Reference #060008.
Stated she wanted to go over recent changes to my Federal Student Loan

Received several calls last week from Virginia Davis saying options have changed for repaying Federal Student Loans. Left a number to call her back 866-789-1441 Ref#xxxxxxx. Called back and spoke with Jerry Avita who sent an email. www. studentloanhotline. com
Got my FASFA ID, Email address, SS#, and DOB all while leading me to believe that they were with the Dept. of Ed. After supposedly approving me for an income driven program, they wanted banking info. for the first three months payments. According to them that is the only way to initiate the program. By this time I started to become leery, so I refused to give them that information and requested time to think about it. They informed me that they could not proceed with out this information and with out my signature. I did not give it to them but I have now called my lender and made them aware and have also put an alert on my credit. Beware everyone! This has become both frustrating and exhausting having to be defensive about every single thing in our lives. You have to fact check and research every single life event that happens trying to keep your information safe and secure. Where do they get their information from? Who is selling it to them? The Universities? If so, then it should be stopped! It has become absurd the amount of time required by the consumer to do so and even then, there is no guarantee that you are protected.

Good job on dodging this company’s scam! I wasn’t so smart and gave them 2 payments and I am now trying to get a refund. Good luck to me...

You shut the scam down? Really? Because they just called me, and I called them back and well, they’re still in business! Get to work!

If you got a call from the companies the FTC sued, including Elegant Solutions, Inc. (also doing business as Federal Direct Group); Trend Capital Ltd. (also doing business as Mission Hills Federal); Dark Island Industries, Inc. (also doing business as Federal Direct Group and formerly known as Cosmopolitan Funding, Inc.); Heritage Asset Management, Inc. (also doing business as National Secure Processing); Tribune Management, Inc. (also doing business as The Student Loan Group); and three individual defendants, Mazen Radwan, Rima Radwan, and Dean Robbins, please report that to the FTC at www.FTC.gov/Complaint.

After the FTC filed the complaint, a federal court temporarily halted the scheme and froze its assets. Read more in the press release announcing the action.

Is this a class action? I've been trying to get my money back from this stupid company for 2 years now.

If only this were true. I still get these calls daily. And I don't even HAVE any student loans.

Received a call from a lady with last name of Jackson stating that I was late on my Federal Student Loan Debt (I don't have one). Number was 888-855-2911. Said I'd lose thousands if I didn't call her back.

They are already up and running and calling with spoofed phone numbers.

I have some serious information in regards to this think I need to speak to someone

You can report fraud to the FTC at www.FTC.gov/Complaint or call 1-877-382-4357.

So, what happens now? I fell for this :( I just talked to my student loan representative and nothing has been applied. They've taken two payments! How do I stop them withdrawing money?

After the FTC filed a complaint in July seeking to end the the company's deceptive practices, a federal court temporarily stopped the scheme and froze its assets.

A company called Fast Track Servicing is doing the same thing.

When you say FTC shuts down student loan debt relief scheme, but I just received a call that said.. " Hi, it's Lisa from the student advisory board ...." I am at a point that I have to let everything go to voicemail if it is not a contact in my phone. This one left a voicemail.

I got a vc msg from a Jennifer telling me I must call back immediately to negotiate a settlement. I don't HAVE student loans, college for me was DECADES ago PIF at the time of classes, so this is comical but highly annoying.

I am on the do not call registry, but I still get scam calls.
Today I got a call from a number that controlls my phone. I could not stop the ringing to disconnect call. It just kept ringing though I pressed the disconnect button. So I answered it and tried to dos onnect it and could not.
Recorded call was about student loans and though in the past it asked if you want to be taken off their call list and I pressed the right button they started calling me again over and over.
It is so frustrating.

The student loans scams are still out there. I got a message on my answering machine today from an "Ashley White" (no company affiliation) saying she was "calling in regards to your student loans" and needed information due to "changes that have taken place." Callback number was 866-791-9527, but the caller ID for the call's origin was 636-323-5322 (probably spoofed). The message even provided a "reference number" to give "Ashley" when calling her back. Impressively professional-sounding, except that I have never had any student loans. Unspecified "changes that have taken place" ... dang, that's well-crafted! Don't fall for this one, folks!

I got a call from 203-810-1627, spoofed number from my old area code. "Andrea" was "calling back about my student loan that I asked for help with". Loud forceful voice; sounded like a recording. I said truthfully "I don't have a student loan. I had scholarships!" Click. I am nervous about why my number or name would have ended up on their list. I attended 2 universities without any loans and got my final degree in 1992.

My mom is being harassed by these. She's in her 70's, never had a student loan but is getting the calls over and over. On the message each caller gives a different name and number but is otherwise verbatim. "I'm with the Student Loan Advisory Board...federal student loan forgiveness plan..." Searching online shows she's not the only one being hounded by these.
Monica 877-333-9970
Emily 866-680-1070
Jessica 866-380-4020
Mary 877-262-3012
Those were the ones I personally heard on her machine. How to make them stop? My mom can't recall details (exact time, first call, etc.) And it's not all coming from one number for rejection. Both of these seem to be required to report on ftc.gov/complaints or whatever the site was.

I truly appreciate you contacting me via e-mail to let me know this was going on. Now I just hope I can get my money back from these thieves!

Because of the time during which I matriculated, I have no student loans. I paid for my graduate school and had scholarships and family help for my undergraduate. I have been PLAGUED with calls from the student loan forgiveness center. I have blocked them repeatedly. I know that supposedly communicating with them that I no longer want to receive calls and getting on the FTC "do not call" list is supposed to entitle me to get $500 for subsequent calls, but the legislation does not explain how. Perhaps a website where people like me can file complaints after getting on the do not call list and informing these merchants that we do not want their calls? I would be delighted to give the government a percentage of my $500 because I get so many calls that we would both be benefitted.

Just received three calls, all from a 'Student Loan Advisory Board' about loan forgiveness 'plan'. Numbers from Linda at 866-366-2616, Tracy (who sounded a lot like Linda) at 866-566-3660,and 866-606-3236 (didn't state a name).

They are at it again! 9493962104, Caller left message identifying himself as Jason Hunter. I called back to get a bit of information/answers like a loan number, where they got my phone number, etc.. Hung up on me 4 times, as well as 4 times when they recognized my number - so I used a different phone, lol.
The number comes back as California with initial use/complains in Sept & Oct a huge spike.

Is there any updates to this case? I'd like to know if we are able to recoup money taken from me and not applied as instructed. Is there a civil case? I'd like to join in the civil case if there is one.

I've received 92 calls over the last 13 months from various individuals offering a student loan reduction. I've NEVER had any student loans and I graduated from college over 45 years ago! I ask them how they obtained my number and their reply is "you have a student loan ID number that appears on our registry". Ask them to provide the details; name, address, amount owned, what institution, etc. associated to the ID number and they say that have no name nor details, just the phone number and ID associated to loan...which they say they can't reveal the ID until I provide details. Really? How then do they know whom to call. Major SCAM and the calls are getting utterly ridiculous. Other than blocking the number what can be done to shut all these people down?

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