We already know that some debt settlement programs provide little relief for debtors, and consumers who contributed to the $1.2 trillion student loan debt tab appear to be the top target for these companies. Today, the Illinois Attorney General announced lawsuits against a pair of debt-settlement companies that targeted, and allegedly misled, student loan borrowers.
According to a news release from Illinois Attorney General Lisa Madigan’s office, the companies allegedly exploit people struggling to repay their student loan debts.
The two lawsuits contends that Texas-based Broadsword Student Advantage [PDF] and Chicago-based First American Tax Defense [PDF] lured borrowers into paying hundreds of dollars upfront by misleading them about those fees and at times claimed to be affiliated with federal relief programs.
Madigan alleges the companies sought to scam vulnerable people into paying as much as $1,200 upfront for bogus services, including assistance enrolling in a fake forgiveness program or for government services that are already free of charge.
Illinois Files Suits Against Debt Settlement Companies That Allegedly Scammed Student Loan Borrowers – Consumerist
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