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Is It Debt Relief or Is It a Scam? Student Debt Relief Shouldn’t Come with $1000 Fees and Usury Interest

  • New York AG Letitia James reached a settlement with student debt relief companies Debt Resolve, Inc., Student Loan Care, LLC, and Progress Advocates, LLC, as well as related individuals (collectively, “Debt Resolve”) to resolve allegations of fraudulent debt relief practices in violation of New York State’s General Business Law and the federal Credit Repair Organization Act, Truth in Lending Act, and Telemarketing Rule, among others.
  • According to the complaint, Debt Resolve was allegedly part of a 10-member ring of student debt relief companies that tricked consumers into paying over $1,000 fees for services available for free from the federal government, charged over 20% in interest in excess of the state usury cap, fraudulently claimed affiliation with the government, and promised loan forgiveness they could not provide.
  • Under the terms of the proposed stipulated judgment, Debt Relief must pay $250,000 as part of a $5.5 million partially suspended judgment and is barred from debt relief activities and from collecting money from any of its current customers or selling or assigning any debts owed by its customers, among other things.