Monday, December 11, 2023
Lawyers Run The WorldIllinois AG Targets Student Debt Relief Providers

Illinois AG Targets Student Debt Relief Providers


- Advertisment -spot_img

The Illinois Attorney General yesterday filed lawsuits targeting what it alleges to be student loan debt scams that purportedly seek to exploit people struggling to repay their debt. The lawsuits are the first in the nation to crack down on an emerging industry of alleged scam operations charging upfront fees for services or for government services that may already be free of charge.

The AG filed the suits against First American Tax Defense LLC based in Chicago and Broadsword Student Advantage LLC based in Frisco, Texas, alleging the companies were unlicensed, engaged in deceptive marketing practices and illegally charged consumers hundreds of dollars in upfront fees to reduce or eliminate their student loan debt burden.  The Illinois AG alleges the companies offered assistance enrolling in a fake “Obama forgiveness program.”

“These companies illegally charge fees for services that student loan borrowers can obtain themselves through government programs at no cost,” the AG said.  The defendants advertised heavily via radio, offering consumers a myriad of options to ease their debt burden, via consolidation or forgiveness, based on the companies’ representations of expertise and what the AG believes to be a false affiliation with the U.S. Department of Education.  The companies are alleged to offer to cut student loan payments in half or eliminate them entirely, and specifically offer public service employees a loan debt forgiveness program for which the companies could not qualify them. 

The AG office’s lawsuits target operations that it believes are attempting to circumvent an Illinois law intended to ban companies from charging people upfront fees for so-called debt settlement services.  These suits come at a time when the Consumer Financial Protection Bureau has also stepped-up enforcement over debt relief service providers.

The lawsuits allege the companies are in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, the Credit Services Organizations Act and the Debt Settlement Consumer Protection Act.   In 2010, the Illinois AG helped pass the Debt Settlement Consumer Protection Act to ban companies from charging upfront fees to consumers for help with debt relief.

The lawsuits allege the companies are not complying with the requirements of the Debt Settlement Consumer Protection Act and, in addition, are not providing any meaningful assistance to reduce consumers’ student loan debt.


Richard B. Newman
Richard B. Newman
Richard B. Newman is an Internet Lawyer at Hinch Newman LLP focusing on advertising law, Internet marketing compliance, regulatory defense and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

What's your opinion?

Latest news

Yahoo! Rises from the Digital Ashes: An AI Comeback Tale.

Silicon Valley giants and plucky startups alike vie for the spotlight in the adtech world but a familiar name...

Billion-Dollar Blindspots: The ANA Report’s Eye-Opening Revelations

In the complex world of digital advertising, the Association of National Advertisers (ANA) has released a groundbreaking report, shedding...

Streaming TV’s Power Couple: FreeWheel and Index Exchange Join Forces

This era is definitely characterized by the rapid and transformative growth of streaming television, and the advertising and programmatic...

The Partnership Pioneers:’s Game-Changing Year in Review

As 2023 sketched its vibrant narrative, dazzled as a trailblazer in the realm of international performance marketing and...

The Great Attribution Illusion: A Marketer’s Modern-Day Haunting

Attribution in marketing is a specter that haunts the digital corridors with promises and pitfalls alike—a phantom stitched together...

Roblox Roulette: Why Some Brands Win, and Others Just Lose

A common misconception continues to lure brands into treacherous waters: the belief that mere presence guarantees relevance, and relevance,...

Must read

Yahoo! Rises from the Digital Ashes: An AI Comeback Tale.

Silicon Valley giants and plucky startups alike vie for...

The Partnership Pioneers:’s Game-Changing Year in Review

As 2023 sketched its vibrant narrative, dazzled as...

You might also likeRELATED
Recommended to you