The Federal Trade Commission, along with 11 states and the District of Columbia, just announced “Operation Game of Loans.” This is the first coordinated federal-state initiative targeting deceptive student loan debt relief scams. The nationwide crackdown encompasses 36 actions by the FTC and state attorneys general against bad actors that are alleged to have used deception and false promises of relief to collect more than $95 million in illegal upfront fees from consumers over a number of years.
The FTC reports that “Operation Game of Loans” includes seven FTC actions: five new cases, one new judgment in favor of the FTC, and a preliminary injunction entered in a case filed earlier this year. In each of these cases, the FTC alleges that the entities charged consumers illegal upfront fees, falsely promised to help reduce or forgive student loan debt burdens, and pretended to be affiliated with the government or loan servicers, in violation of the FTC’s Telemarketing Sales Rule and the FTC Act.
“Operation Game of Loans” includes coordinated actions by the attorneys general for Colorado, Florida, Illinois, Kansas, Maryland, North Carolina, North Dakota, Oregon, Pennsylvania, Texas, Washington, and the District of Columbia.
Further developments in this coordinated enforcement effort are expected.