Three years after filing an injunction against Premier Student Loan Center and its affiliated companies, the Consumer Financial Protection Bureau is distributing over $95 million in redress to more than 87,000 borrowers that were deceived about student loan debt relief services.
- The CFPB filed an injunction in 2019 alleging Premier Student Loan Center violated the Consumer Financial Protection Act of 2010 and the Telemarketing Sales Rule.
- Investigators discovered that Premier Student Loan Center was actually taking payments from borrowers and, rather than loan forgiveness, was putting them in automatic forbearance.
- Redress payments of over $95 million from the CFPB Civil Penalty Fund are being distributed to 87,285 affected borrowers. The case against Premier Student Loan Center, however, won’t be heard in court until spring 2023.
Misrepresentation of Automatic Forbearance
The Consumer Financial Protection Bureau, the Minnesota Attorney General’s office, the North Carolina Department of Justice, and the Los Angeles City Attorney filed the original injunction in late 2019. The CFPB alleged that Consumer Advocacy Center, which does business as Premier Student Loan Center, True Count Staffing (also known as SL Account Management), and Prime Consulting (also known as Financial Preparation Services) violated the Consumer Financial Protection Act of 2010 and the Telemarketing Sales Rule by collecting advanced fees totaling $71 million for services that were either misrepresented or never completed.
Premier Student Loan Center offered a valuable service—they promised to obtain loan forgiveness, navigate elusive loan forgiveness programs, and lower monthly payments. Complaints on the Better Business Bureau page for Premier Student Loan Center echo the same theme—borrowers were told their loans would be forgiven and to stop making payments to their loan servicers. Instead, they were to make payments directly to Premier Student Loan Center.
Investigators later found that the company was taking the payments and putting the borrowers in automatic forbearance—not forgiveness. They also discovered that Premier Student Loan Center had submitted false information for their clients to obtain lower monthly payments. Complaints on the company's BBB page indicate that once borrowers discovered the deception, the company website was taken down, and phone calls went unanswered.
In addition to the fraudulent activity, the companies violated the Telemarketing Sales Rule. The rule outlaws deceptive practices for debt relief services, explicitly stating that they may not sell any service that results in the customer’s failure to make timely payments to creditors or do anything that would adversely affect their creditworthiness.
The Case Continues
Redress payments from the CFPB Civil Penalty Fund are already beginning to be distributed to the 87,285 affected borrowers, although the actual case against Premier Student Loan Center won’t be heard in court until spring 2023. A statement on Los Angeles City Attorney Hydee Feldstein Soto’s website indicated that this case was only the beginning of their efforts to curtail deceptive practices.
“My office will prosecute these types of claims using every tool at our disposal and continue to help victims get their money back,” Feldstein Soto said. ”This announcement is a continuation of the strong consumer protection work that the Los Angeles City Attorney’s Office has become known for throughout California and the nation. We will never hesitate to step in and protect consumers.”