Florida Attorney General Says Student Loan Firm Bilked Consumers

(CN) – The Florida Attorney General’s office sued a student loan debt relief firm it claims was nothing more than the front for a scam that bilked consumers out of millions of dollars.

As described in a May 23 complaint filed in Palm Beach County, Florida, Strategic Student Solutions and several related companies falsely promised to reduce or eliminate student loan debt in exchange for upfront fees ranging from $166 to $233, and monthly payments.

Also offered to borrowers as part of the alleged scam were bogus credit repair services.

“Strategic represents to consumers that upon receipt of their third payment, their current student loan monthly payment will be reduced; that the new set amount will be automatically withdrawn from consumers’ bank accounts; and that the new, lower monthly payments will go towards satisfying consumers’ student loan balances,” the attorney general’s office said in a statement.

None of this proved to be true, it says.

The state also says some students were told that after paying the fees and commencing to make additional monthly payments, they qualified for ” “Obama’s Student Loan Forgiveness Plan,” and that their loans would be forgiven in full.

This also proved not to be true, the attorney general’s office says.

According to the complaint, Strategic failed to make payments to the lenders as promised, and when consumers contacted their lenders they found out that Strategic didn’t have a business relationship with them.

The attorney general’s office says its investigation revealed that the student loan services allegedly provided by Strategic were actually offered free of charge by the federal government

“Consumers reported that Strategic did not provide the promised student debt relief services; that Strategic failed to provide sufficient consumer support; and that consumers were unable to cancel defendants’ student loan debt services even after following the proper cancellation procedures,” the complaint says.

The attorney general is seeking injunctive relief on claims of violation of the Florida’s Deceptive and Unfair Trade Practices Act.

A representative of Strategic Student Solutions could not be reached for comment on the lawsuit.

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