On April 16, the FTC announced that the U.S. District Court for the Central District of California entered a temporary restraining order (TRO) against the operators of an alleged student loan debt relief scheme. According to the complaint, since at least February 2022, the operators allegedly cold-called consumers, thousands of whom were purportedly on the National Do Not Call Registry, and falsely claimed affiliation with the U.S. Department of Education or consumers’ actual loan servicers. The complaint alleges the operators used false promises of student loan forgiveness to induce consumers into paying upfront monthly fees as high as $1,400, collecting at least $8.8 million from consumers. In numerous instances, the operators allegedly instructed consumers to stop paying their loan servicers without disclosing that nonpayment could decrease credit scores, increase loan balances, or trigger collection actions.

The FTC charged the operators with violating the FTC Act, the Telemarketing Sales Rule (TSR), the Impersonation Rule, and the GLBA, alleging the operators: (i) made deceptive representations regarding their debt relief services in violation of the FTC Act; (ii) collected advance fees before providing any debt relief services and placed calls to numbers on the National Do Not Call Registry in violation of the TSR; (iii) falsely posed as government entities and loan servicers in violation of the Impersonation Rule; and (iv) used false representations to obtain consumers’ financial account information in violation of the GLBA. The TRO includes an asset freeze, prohibitions on marketing or selling debt relief services through misrepresentations, and a ban on charging advance fees for debt relief services before they are fully performed. The order also prohibits the release of consumer financial data and identifying information obtained through the alleged scheme.