The Federal Trade Commission (FTC) has announced its intervention to halt two fraudulent student loan debt relief schemes that allegedly defrauded students out of approximately $12 million. These schemes, according to the FTC, employed deceptive tactics by making false claims about loan forgiveness and repayment programs that did not exist. Moreover, the companies involved falsely represented themselves as affiliated with the Department of Education, misleading students into believing that the illegal fees they collected would be applied towards their loans.
The FTC highlighted the prevalence of student loan debt and the vulnerability of borrowers, especially amid the uncertainty surrounding loan forgiveness. Samuel Levine, the Director of FTC’s Bureau of Consumer Protection, emphasized the agency’s ongoing efforts to combat financial exploitation and protect consumers from deceptive practices.
The complaints filed by the FTC accuse SL Finance LLC, along with its owners Michael Castillo and Christian Castillo, as well as BCO Consulting Services Inc., SLA Consulting Services Inc., and their respective owners Gianni Olilang, Brandon Clores, Kishan Bhakta, and Allan Radam, of targeting consumers seeking student loan repayment solutions. Low-income borrowers burdened with substantial student debt were enticed to pay upfront fees ranging from hundreds to thousands of dollars. The defendants allegedly deceived borrowers by promising loan forgiveness and enrollment in legitimate repayment programs. In reality, the payments made by borrowers were pocketed by the defendants.
Furthermore, the FTC alleges that the defendants misrepresented their affiliation with the Department of Education and falsely claimed that they would assume loan servicing responsibilities. These deceptive practices violated the FTC Act, the Telemarketing Sales Rule (TSR), and the Gramm-Leach-Bliley Act.
In response to the FTC’s complaints and to prevent further deception, a federal court issued temporary restraining orders and froze the assets of SL Finance LLC, its owners, and BCO Consulting Services Inc. and SLA Consulting Services Inc., as well as their respective owners.
The FTC’s decision to file the complaints was supported by a unanimous 3-0 vote. The cases will now be handled by the U.S. District Court for the Central District of California.
Katherine Aizpuru and Samuel Jacobson, staff attorneys from the FTC’s Bureau of Consumer Protection, are leading the legal efforts in this matter.
The FTC is a regulatory agency dedicated to promoting consumer protection, ensuring fair competition, and providing consumer education. Individuals can find more information about consumer-related topics, report fraud and scams, and stay updated on FTC news and alerts through their official website and social media channels.