FTC obtained a brief restraining order to halt an alleged student loan debt relief rip-off
Operators allegedly impersonated the U.S. Department of Education and picked up as much as $8.8 million in unlawful charges
Consumers have been charged upfront month-to-month charges as excessive as $1,400 for providers that didn’t exist
The Federal Trade Commission has moved to cease what it describes as a widespread student loan debt relief scheme that focused financially burdened borrowers with false guarantees of loan forgiveness.
The company mentioned it secured a brief restraining order towards firms NERD Solutions Inc. and ED REF Inc., together with their operators, over allegations they misled shoppers and picked up thousands and thousands in unlawful charges.
According to the FTC, the defendants posed as associates of the U.S. Department of Education or reliable loan servicers, utilizing misleading telemarketing techniques to achieve shoppers — together with 1000’s listed on the National Do Not Call Registry.
The company alleges that, starting in no less than February 2022, the operation lured borrowers with claims that they might safe student loan forgiveness or considerably cut back debt. Victims have been then charged upfront month-to-month charges that generally reached $1,400, regardless of federal guidelines usually prohibiting such advance funds for debt relief providers.
Allegedly collected $8.8 million
In whole, the scheme is accused of amassing no less than $8.8 million from shoppers already scuffling with student loan obligations.
The FTC’s grievance fees the defendants with violating a number of legal guidelines, together with the FTC Act, the Telemarketing Sales Rule, the Impersonation Rule, and the Gramm-Leach-Bliley Act.
A federal court docket within the Central District of California granted the short-term restraining order on April 13, 2026, successfully halting the operation whereas the case proceeds.
The FTC famous that its actions are a part of ongoing efforts to fight scams targeting student loan borrowers. The company additionally reiterated that it doesn’t demand upfront funds or promise loan forgiveness, urging shoppers to be cautious of comparable claims and report suspected fraud.
The case stays pending, and the allegations haven’t but been confirmed in court docket.
Mark HuffmanReporter
Mark Huffman has been a shopper information reporter for ConsumerAffairs since 2004. He covers actual property, fuel costs and the economic system and has reported extensively on negative-option gross sales. He was beforehand an Associated Press reporter and editor in Washington, D.C., a correspondent for Westwood One Radio Networks and Marketwatch.
