The Federal Trade Commission recently reached a settlement agreement with a Los Angeles-based company purporting to offer student loan debt relief services for alleged violations of the FTC Act and the Telemarketing Sales Rule.

The FTC filed a complaint against defendants Salar Tahour and his companies, M&T Financial Group and American Counseling Center Corp., as part of an initiative known as “Operation Game of Loans”, a coordinated effort between the FTC and numerous state attorneys general intended to crack down on deceptive student loan debt relief scams. The defendants, who operated as Student Debt Relief Group, SDRG, Student Loan Relief Counselors, SLRC, StuDebt, and Capital Advocates Group, marketed themselves as student loan debt relief servicers. However, according to the FTC the companies engaged in a scheme that defrauded consumers out of $7.3 million.

In its complaint, the FTC alleged that the defendants operated an unlawful student loan debt relief service and engaged in illegal and deceptive practices. These included violating the Telemarketing Sales Rule by contacting consumers on the National Do Not Call Registry and charging advanced fees for their debt relief services.  They were also charged with violating the FTC Act by misrepresenting to consumers that they were affiliated with the U.S. Department of Education. The FTC also alleged that the companies told consumers they were operating under the Federal Student Loan Forgiveness Act of 2012 – an act that was proposed during former President Obama’s administration but was never signed into law.

Per the terms of the settlement order, the defendants are permanently banned from offering any type of debt relief product or service and must pay a monetary judgement of over $12 million –  $11,694,347.49 of the judgment representing the estimated amount of injury caused to consumers by the defendants’ actions.