Illinois files first lawsuits to crack down on student loan scams
Illinois Attorney General Lisa Madigan filed lawsuits targeting scammers trying to make a fast buck on the backs of people with student loan debt.
Madigan says her lawsuits, filed Monday, July 14, 2015, are the first in the nation to crack down on student loan scammers.
“These companies illegally charge fees for services that student loan borrowers can obtain themselves through government programs at no cost,” Madigan said. “My office will be aggressive in cracking down on scam operations that prey on student loan borrowers for profit.”
The two companies Madigan targeted first are Chicago-based First American Tax Defense LLC and Texas-based Broadeword Student Advantage LLC. Madigan claims the companies are not licensed, and they illegally charged hundreds of dollars in upfront fees to reduce or eliminate student loan debt, including offers to enroll in a phony “Obama forgiveness program.”
Madigan said the companies advertised heavily in Illinois, and that current and former students should never pay upfront for help with student loan debt relief.
For information on legitimate sources of free assistance, consumers can contact the Consumer Financial Protection Bureau or the National Consumer Law Center. For problems with your student loan servicer or a debt collector, consumers can also contact the U.S. Department of Education’s Student Loan Ombudsman at 1-877-557-2575 or www.ombudsman.ed.gov, the Consumer Financial Protection Bureau or Attorney General Madigan’s Consumer Fraud Hotline at 1-800-386-5438.