Federal and state authorities are cracking down on multiple purveyors of so-called “student loan debt relief,” alleging that the companies took in more than $95 million in illegal up-front fees from American consumers in exchange for little or no help, ABC News reported on Friday. The actions, announced on Friday as “Operation Game of Loans” by the Federal Trade Commission and attorneys general in 11 states and the District of Columbia, include five new cases, one new judgment in favor of the FTC and a preliminary injunction entered in a case filed earlier this year. Officials say that the debt relief businesses employed a variety of deceptions, including pretending to be affiliated with a federal debt relief program or a loan servicer, falsely promising to reduce or forgive debt and charging illegal upfront fees. Some of the businesses would invoke real federal debt relief programs — but fail to mention that these programs are free to apply for, narrowly designed and most consumers do not qualify. States involved in the crackdown were Colorado, Florida, Illinois, Kansas, Maryland, North Carolina, North Dakota, Oregon, Pennsylvania, Texas and Washington, along with the District of Columbia, but the companies operated in other states as well.
