Companies claiming to help students, borrowers ordered to stop using government logo

The Department of Education sent cease-and-desist letters to two companies claiming to help students and student loan borrowers last week, accusing them of improperly implying an affiliation with the agency and asking them to stop.

The letters claim that both companies used the Department of Education’s logo in various places on their sites without its permission. The feds are asking the companies to stop using the logo and to include a disclaimer noting that the sites aren’t affiliated with the Department.

These letters come just months after the Department sent similar notices to two companies claiming an affiliation with the agency. Those firms and at least one of the firms the Department sent a cease-and-desist letter to last week appear to be so-called debt relief companies. Regulators and states attorneys general have accused these businesses of charging borrowers high up front fees to enroll in programs to better manage their student loan debt that borrowers can actually access for free through the Department.

Film trailer: ‘Rescue Dogs’

(1:55)

Watch the film trailer for “Rescue Dogs.”

The roughly 40 million Americans with $1.3 trillion in student loan debt have created a population ripe for abuse. Consumer advocates say sloppy student loan servicing has created a vacuum of legitimate information and so borrowers who are desperate for relief are turning to scam operators instead.

The companies also use aggressive tactics to lure borrowers, including robocalls, mailings and social media postings that imply an affiliation with the government and even targeted Internet marketing that imply they’re endorsed by a borrower’s alma mater.

Federal agencies and state AGs have been cracking down on these companies over the past several months. The Consumer Financial Protection Bureau shut down one of these firms Wednesday. That was just weeks after a federal judge ruled in favor of the agency against another student debt relief company, ordering the firm to pay $8.2 million to affected victims.

Filed in: Top News Tags: 

You might like:

NewsWatch: Weekend roundup: Facebook and Turtleboy | When to sell your home | Make money on ‘Fortnite’ NewsWatch: Weekend roundup: Facebook and Turtleboy | When to sell your home | Make money on ‘Fortnite’
NewsWatch: The ‘kiddie tax’ is getting easier (and maybe cheaper) under the new tax law NewsWatch: The ‘kiddie tax’ is getting easier (and maybe cheaper) under the new tax law
Capitol Report: Tax breaks for home mortgages to sink 30% in 2018 due to Trump tax law, study shows Capitol Report: Tax breaks for home mortgages to sink 30% in 2018 due to Trump tax law, study shows
The Wall Street Journal: U.S. to allow another 15,000 unskilled foreign workers on temporary H-2B visas The Wall Street Journal: U.S. to allow another 15,000 unskilled foreign workers on temporary H-2B visas
The Wall Street Journal: Ireland overwhelmingly votes to legalize abortion The Wall Street Journal: Ireland overwhelmingly votes to legalize abortion
BookWatch: Your midlife malaise is totally normal — and this simple strategy can keep it from turning into a crisis BookWatch: Your midlife malaise is totally normal — and this simple strategy can keep it from turning into a crisis
BookWatch: Stay away from these 3 types of financial advisers (and that’s coming from an industry insider) BookWatch: Stay away from these 3 types of financial advisers (and that’s coming from an industry insider)
The Wall Street Journal: Trump makes it easier to fire federal workers The Wall Street Journal: Trump makes it easier to fire federal workers
© 3059 Stock Investors News. All rights reserved. XHTML / CSS Valid.