The Federal Trade Commission is sending thousands of checks to student loan borrowers who were victims of a debt-relief scheme.
This week, the FTC announced its plans to refund consumers who paid to have their debt resolved. More than 14,500 individuals paid money to Student Advocates with hopes of clearing their debt. However, the entire company was running a scam.
“None of the money collected by the defendants was paid toward consumers’ student loans,” the FTC said.
In September 2019, the FTC filed a complaint against the company, alleging they charged illegal upfront fees and lied to borrowers. The company persuaded consumers to accept high-interest loans and falsely promised lower payments and debt elimination.
To resolve the issue, the FTC will send the consumers checks that total $822,000 together and will need to be cashed within 90 days of receipt.
