The FTC has recently taken action against two student loan debt relief companies and their owners.
In the first case, a federal judge has permanently banned Florida-based Start Connecting LLC and Colombia-based Start Connecting SAS (doing business as USA Student Debt Relief (USASDR)), and their owners and operators Douglas Goodman, Doris Gallon-Goodman, and Juan Rojas from the debt relief industry as well as from participating in any telemarketing. The defendants must turn over more than $1 million in assets to resolve Federal Trade Commission charges that the USASDR operation bilked millions out of struggling student loan borrowers, according to an order filed in the U.S. District Court for the Middle District of Florida.
Specifically, the FTC had alleged that the companies:
- Pretended to be affiliated with the Department of Education.
- Made false promises of low, fixed monthly payments and loan forgiveness.
- Illegally called thousands of consumers on the Do Not Call Registry.
- Collected more than $7.3 million in illegal advance fees and payments.
- Promoted fake consumer reviews.
- Promised to apply consumers' monthly payments to their loan balances, while pocketing the money and sending much of the funds to their call centers in Colombia.
To settle those charges, the order prohibits the defendants from:
- Falsely claiming any affiliation with any person, corporation, or government entity.
- Falsely promising to enroll consumers in programs that guarantee permanent low, fixed monthly payments and lump-sum loan forgiveness of remaining balance.
- Charging consumers illegal advance fees.
- Falsely marketing services with fake testimonials and reviews online and making misrepresentations about other products and services.
The order also imposes a judgment of $7.3 million, which is partially suspended due to an inability to pay, and requires the defendants to turn over more than $1 million in personal and business assets.
In the second case, an alleged fraudulent student loan debt relief operation, Panda Benefit Services, its affiliates, its operators and its owners, were permanently banned from the debt relief industry and required to turn over all assets to resolve allegations that they misled consumers.
At the FTC's request, the U.S. District Court for the Central District of California entered a default judgment against Public Processing Services, Quick Start Services, and Signature Processing Services. Previously on October 2, 2024, the court had entered stipulated orders with Panda Benefit Services, Pacific Quest Services, Prosperity Loan Services, Emiliano Salinas, and Melissa Salinas and with Clarity Support Services and Christopher Hanson.
The FTC alleged that Panda Benefit Services and the other defendants:
- Tricked consumers into paying illegal fees toward fake student loan forgiveness.
- Falsely claimed that consumers who paid into the defendants' program were guaranteed loan forgiveness and that the program would reduce their loan payments.
- Pretended to be affiliated with the Department of Education and falsely told consumers that they would take over the servicing of their loans, while, in reality, pocketing consumers' money.
- Swindled more than $16.7 million in illegal advance fees from students who sought debt relief.
The court entered a stipulated order with Select Student Services and Eduardo Martinez; at the request of the FTC. The court entered a default judgment against Public Processing Services, Quick Start Services, and Signature Processing Services. On October 2, 2024, the court entered stipulated orders with Panda Benefit Services, Pacific Quest Services, Prosperity Loan Services, Emiliano Salinas, and Melissa Salinas and with Clarity Support Services and Christopher Hanson.
The final orders ban defendants from the debt relief industry. The orders against Select Student Services and Eduardo Martinez and Public Processing Services, Quick Start Services, and Signature Processing Services also ban them from telemarketing. In addition, the orders specifically prohibit the defendants from:
- Making misrepresentations about other products or services.
- Using false statements to collected consumers' financial information.
- Impersonating anyone or claiming to be from a government entity.
The order also imposed a monetary judgment of almost $26.8 million against Student Services and Martinez, most of which was suspended due to an inability to pay. However, those defendants are required to turn over millions in personal and business assets.
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