New York’s attorney general yesterday sued 10 companies and two executives over their alleged roles in a scam to induce thousands of struggling borrowers into buying student loan debt-relief services that they could have received for free, Reuters reported. Barbara Underwood, the attorney general, said defendants typically charged more than $1,000 for their services, which often came with usurious interest rates, after luring borrowers with false claims such as being affiliated with the government, or that their help was needed. “It strikes me that the lawsuit has merit,” Mark Kantrowitz, publisher of Savingforcollege.com, said in an interview. “There are companies that can take advantage of borrowers’ lack of awareness of what they can do.” The defendants include Debt Resolve Inc. of Hawthorne, N.Y., Chief Executive Bruce Bellmare and his predecessor Stanley Freimuth. Hutton Ventures LLC, a Santa Ana, Calif.-based business partner of Debt Resolve, and Equitable Acceptance Corp, a Minnetonka, Minn.-based financing company, are also among the defendants.
