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The Federal Trade Commission recently reached a settlement
agreement with a Los Angeles-based company purporting to offer
student loan debt relief services for alleged violations of the FTC
Act and the Telemarketing Sales Rule.
The FTC filed a complaint against defendants Salar Tahour and
his companies, M&T Financial Group and American Counseling
Center Corp., as part of an initiative known as "Operation
Game of Loans", a coordinated effort between the FTC and
numerous state attorneys general intended to crack down on
deceptive student loan debt relief scams. The defendants, who
operated as Student Debt Relief Group, SDRG, Student Loan Relief
Counselors, SLRC, StuDebt, and Capital Advocates Group, marketed
themselves as student loan debt relief servicers. However,
according to the FTC the companies engaged in a scheme that
defrauded consumers out of $7.3 million.
In its complaint, the FTC alleged that the defendants operated
an unlawful student loan debt relief service and engaged in illegal
and deceptive practices. These included violating the Telemarketing
Sales Rule by contacting consumers on the National Do Not Call
Registry and charging advanced fees for their debt relief
services. They were also charged with violating the FTC Act
by misrepresenting to consumers that they were affiliated with the
U.S. Department of Education. The FTC also alleged that the
companies told consumers they were operating under the Federal
Student Loan Forgiveness Act of 2012 – an act that was
proposed during former President Obama's administration but was
never signed into law.
Per the terms of the settlement order, the defendants are
permanently banned from offering any type of debt relief product or
service and must pay a monetary judgement of over $12 million
– $11,694,347.49 of the judgment representing the
estimated amount of injury caused to consumers by the
defendants' actions.
The Troutman Sanders' Consumer Financial Services
Law Monitor blog offers timely updates regarding the financial
services industry to inform you of recent changes in the law,
upcoming regulatory deadlines and significant judicial opinions
that may impact your business. To view the blog, click
here
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