California student loan debt relief company deceived consumers, Maryland AG says

Maryland Attorney General Brian E. Frosh has ordered a California-based student loan debt relief company to stop doing business and return money to consumers after finding it violated consumer protection laws.

The state is requiring Huntington Beach, Ca.,-based Student Loan Counsel to pay damages to Maryland residents who never received services or refunds. According to the order, Student Loan Counsel offered lower monthly payments or debt forgiveness on student loans, charging an advance fee of $599 and $39 per month for the term of the loan, but failed to deliver services. The business also lacks a required credit services business license, the AG’s office said.

Representatives of Student Loan Counsel could not be reached Friday afternoon.

“These companies took advantage of a vulnerable student population trying to pay off debt,” Frosh said in an announcement Friday.

The order is part of a national crackdown in cooperation with the Federal Trade Commission and 12 state attorneys general that is targeting student loan debt relief scams. Scammers are alleged to have taken more than $95 million in illegal upfront fees from U.S. consumers using deception and false promises.

Maryland’s consumer protection division issued a cease and desist order to Student Loan Counsel after finding it violated the Consumer Protection Act, the Maryland Credit Services Businesses Act and the Maryland Debt Settlement Services Act. Also named in the order were H&S Marketing LLC; Client Processing Services, LLC; Henrique Silva; Melissa Haddad; Cimar Scaff and Gail Ghada Haddad.

The state is requiring the company to post a $100,000 bond to protect consumers before conducing business in Maryland.

Consumers can apply for loan deferments, forbearance, repayment and forgiveness or discharge programs through the U.S. Department of Education or their loan servicer at no cost. Borrowers should never pay an upfront fee for help or disclose their federal student aid ID, the AG’s office said.

lorraine.mirabella@baltsun.com

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