Minnesota AG settles with student debt relief company

State Issues State Attorney General Courts Student Lending Debt Relief Usury Settlement

On April 13, the Minnesota attorney general announced a settlement with a California-based student loan debt relief company that allegedly: (i) collected illegal fees from customers; (ii) misrepresented its services to cease operations in Minnesota by not providing full refunds to its Minnesota consumers; and (iii) violated Minnesota’s Debt Services Settlement Act, Prevention of Consumer Fraud Act, and Uniform Deceptive Trade Practices Act. The AG alleged that the company “falsely promised consumers student-loan forgiveness, when only the federal government can forgive federal student loans.” Under the terms of the settlement, the company is required to pay the AG $18,190.50, which will be used to provide full restitution to consumers. The settlement also requires the company to cease operations in Minnesota until it becomes registered as a debt-settlement service provider.