On June 28, the FTC announced an enforcement action against a student loan debt relief operation that allegedly took over $20.3 million from consumers by falsely claiming affiliation with the Department of Education and falsely promising loan forgiveness. The FTC claims the operation charged consumers illegal upfront fees for debt relief services that were never provided in many instances. The FTC also stated that the operation used telemarketers to make misrepresentations to borrowers and falsely told consumers that they would purchase the consumers’ loans from their federal servicer.

The FTC alleges the operation violated the Impersonation Rule, which became effective in April, which prohibits the impersonation of government agencies and businesses. The FTC alleges the operation also violated the FTC Act, the Telemarketing Sales Rule, and the Gramm-Leach-Bliley Act. The FTC’s complaint resulted in a federal court permanently enjoining future violations, granting preliminary injunctive relief, freezing the operation’s assets, and awarding monetary and other relief for consumers. A temporary restraining order was also issued by the U.S. District Court for the Central District of California.