For Immediate Release:
Thursday, October 31, 2019
(RALEIGH) Attorney General Josh Stein won a temporary restraining order against several debt relief companies after he filed a lawsuit alleging that the companies ran an operation since 2015 that deceived tens of thousands of federal student loan borrowers and charged more than $71 million in unlawful advance fees for student loan debt relief services that can be obtained for free. The companies—Consumer Advocacy Center Inc. (which does business as Premier Student Loan Center), True Count Staffing Inc. (also known as SL Account Management), and Prime Consulting LLC (also known as Financial Preparation Services), and individuals Albert Kim, Kaine Wen, and Tuong Nguyen—are barred from collecting advance fees for student loan debt relief services and from making misrepresentations about their services to consumers. The court also appointed a receiver to oversee the business and froze the defendants’ bank accounts and assets until a preliminary injunction hearing.
“As Attorney General, it’s my responsibility to protect student borrowers who are investing to build their futures,” said Attorney General Josh Stein. “Predatory debt-relief companies that prey on students’ hopes and dreams are unconscionable. My office won’t allow it.”
The lawsuit was filed in federal court in California by Attorney General Stein, the Minnesota Attorney General’s Office, the Los Angeles City Attorney, and the Consumer Financial Protection Bureau. Their complaint alleges that the co-defendants violated the Consumer Financial Protection Act of 2010 and the Telemarketing Sales Rule by deceiving consumers about the companies’ student loan debt relief and modification services. Specifically, the complaint alleges that the defendants:
- Charged and collected illegal advance fees, typically ranging from $900 to $1,300, before consumers received any adjustment of their student loans or made any payment toward any adjusted loans.
- Misrepresented the purpose of the fees they were charging.
- Misrepresented their ability to obtain loan forgiveness or lower borrowers’ monthly payments.
- Did not tell consumers they automatically requested that consumers’ student loans be placed in forbearance so that consumers could pay the defendants’ significant fees, which caused more interest to accrue on consumers’ loans.
- Submitted false information to consumers’ loan servicers in loan adjustment applications to try to qualify consumers for lower monthly student loan payments that consumers did not qualify for, and which caused some borrowers’ loan balances to increase.
The complaint also alleges that the individual defendants substantially assisted the student loan debt relief companies in their operation.
Attorney General Stein is seeking damages, redress for consumers, relinquishment of any ill-gotten gains, and civil penalties.
A copy of the complaint is available here.
Laura Brewer (919) 716-6484