Two companies are accused of taking advantage of the uncertainty in student loan debt forgiveness to scam borrowers.
The Federal Trade Commission said it has stopped"scammers" that allegedly collected millions of dollars in upfront fees as they claimed to offer services related to the"Biden Loan Forgiveness" plan that do not exist.
Following the FTC's complaint, a federal court in California issued a restraining order. The companies are accused of unfair or deceptive acts or practices in or affecting commerce, violating the Telemarketing Sales Rule, and violating the Gramm-Leach-Bliley Act. In the years since, there has been a lot of uncertainty over student debt relief. In March 2020, then-President Donald Trump issued a moratorium on student loan payments due to COVID-19. Facing pressure from progressives, President Biden ordered that those meeting certain income guidelines would have up to $20,000 in federal student debt forgiven. That plan, however, was denied by the U.S. Supreme Court.
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