Scam artists target many different segments of our society and students struggling with debt is no exception. While student debt relief has been a long time hunting ground for individuals to victimize people, with student loan debt in America reaching an all-time high of $1.4 trillion, it seems that more financial scams are arising than ever before.
The Consumer Financial Protection Bureau is a U.S. government agency that ensures banks, lenders, and financial companies comply with state and federal rules and regulations. In the last 12 months alone, the CFPB has received over 20,000 student loan complaints, as well as, over 2,200 debt-collection complaints related to private and federal student loans. Through its vigilance and help from consumers reporting unfair or illegal loan collection and debt relief practices, the agency has been able to refund nearly $750 million since 2011 to borrowers who were duped.
As the hundreds of reports pile in each month, the FTC and multiple states recently restated their commitment to cracking down on student debt-relief scams. The sweeping crackdown on student debt relief scams has been dubbed operation “Game of Loans” and involves a coordinated federal-state law enforcement initiate targeting deceptive student loan debt relief scams. It includes 36 actions by the FTC and state attorney generals in 11 states, against scammers that have used either false promises or deception to net more than $95 million in illegal upfront fees from American consumers over many years.
So how does one discern a real student debt relief company from the fake ones that are conducting their operations illegally? There are a variety of tactics to target consumers that scammers use including: claiming an affiliation with the Department of Education, sending text messages with student loan help, and “piggybacking” off of new or expanded debt-relief programs on social media.
If you are struggling with student loan debt, there are remedies and ways to obtain help. By making an initial consultation with a local bankruptcy attorney, they will be able to guide you in the right direction and give you real, trusted, and legitimate debt relief companies that specialize in student loans. Any bankruptcy lawyer will also advise you to never pay for debt relief up front and to be weary of companies that charge you for access to government programs.