Shutting Down Illegal Student Loan Relief Schemes

May 10, 2016

 

 On March 15th, the Consumer Financial Protection Bureau (CFPB) requested that a federal district court enter a final judgment and order to shut down StudentLoan Processing.US which is a fictitious business name of Irvine Web Works, Inc and its individual owner, James Krause. The order bans the company and owner from any future involvement in debt relief and student loan services and to pay refunds to thousands of harmed consumers.

 

The CFPB alleged the student debt relief scheme charged borrowers millions of dollars in illegal upfront fees for federal student loan services. The company charged an initial enrollment fee of 1% of the borrowers loan amount plus a monthly maintenance fee of at least $39 per month for the entire repayment term of the loan.

 

Student Loan Processing.US is headquartered in Laguna Nigel, California with another office in Dallas, Texas. They also operated under the websites StudentLoanProcessing.us, StudentLoanProcessing.org and SLpus.org. The companies have been operating throughout the United States since May 2011.

 

The CFPBs lawsuit also alleged the defendants violated Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act (CFPA) using unfair, deceptive or abusive acts or practices (UDAAP) by falsely representing an affiliation of the U.S. Department of Education, charging illegal advance fees and misleading borrowers about the costs and terms of the company’s services.

 

Filed in a California federal district court, the court had granted a summary judgment to the CFPB last month. The proposed judgment and order requires the company to shut down all operations within 45 days of the entry of the court’s judgment, rescind all contracts with consumers and direct the defendants to stop assessing fees. The order imposes a judgment for relief and damages to consumers of over $8.2 million. A significant portion of that payment was suspended based on the defendants’ inability to pay. Under the terms of the order, $326,000 would be sent to the Bureau and would be distributed to compensate victims.

 

Due to the defendant’s inability to pay, the judgment and order imposes a civil money penalty of $1 into the CFPB’s Civil Penalty Fund. This requirement allows victims to possibly be eligible for additional relief from the CFPB Civil Penalty Fund in the future. No determination or amounts have been made yet.

 

If you are a victim of one of these companies, contract the CFPB and file a complaint.  For a copy of the CFPBs complaint against StudentLoanProcessing.US go to:

http://files.consumerfinance.gov/f/201603_cfpb_proposed-stipulated-final-judgment-and-order-student-loan-processing-us.pdf

 

If you have a large amount of student loans, your debt-to-income ratio could be disproportionate and prevent you from acquire a loan for your mortgage or for personal business loan. Further, if you have defaulted on your student loans, the negative credit reporting will certainly affect your credit score and reduce your chances for a good loan for  a home or business. That is why it is so important to consult with an experienced attorney, rather than a private student loan relief company, to determine the best options for student loan relief. Gantenbein Law Firm is experienced in handling consumer rights and debt collection and resolution, including student loan litigation and settlement. Contact our Denver student loan lawyer at 303-618-2122 to for a free consultation of your case, or visit our website at www.gantenbeinlaw.com

 

Gantenbein Law Firm also practices Real Estate Law- including Foreclosure Defense and HOA Defense, Business Law, Tax LawEstate Planning, Wills, Trusts and Probate, and Credit Dispute. To speak to an attorney regarding the best solutions for your case in these matters, call 303-618-2122. Gantenbein Law is located in Denver and serves clients throughout Colorado. 

 

 

 

 

 

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Gantenbein Law Firm