Kentucky AG Strikes Student Loan Scammers

You might not have noticed it, but at the end of last week, Kentucky Attorney General Andy Beshearannounced that a Franklin County circuit judge ordered that Liberty Tax and Student Loan Defense immediately cease operations in the state of Kentucky. The company did not respond adequately to a subpoena issued by the office of consumer protection and the Attorney General’s office is involved in an ongoing investigation into the company’s practices and claims, which are said to be misleading while charging exorbitant fees to consumers. The Florida-based company is no longer allowed to:

1. Do business in the state of Kentucky until the state’s requests for documents are fulfilled.
2. Solicit business from Kentucky citizens by contacting them about their student loans.
3. Entering into contracts with citizens or to collect fees or payments from them.
4. Claim that they are working with the federal government to offer loan forgiveness, discharge, or relief from debt.

Student loan scammers, Liberty Tax and Student Loan Defense, preyed upon students looking for a way to pay down or be forgiven their college debt. They charged an upfront fee, and monthly fees (that were not applied to the existing debt), and clients signed over power of attorney to the company. Other companies are charging desperate students exorbitant fees to enroll them in free government programs, that the students could access themselves. The desperation engendered by student debt has led to increased complaints to the Federal Trade Commission, which reported a 13 percent increase in complaints between 2014 and 2015. My hat is off to Andy Beshear for taking on the scammers and protecting the citizens of his state from being victimized.

FTC Goes to the Mat

The Federal Trade Commission and the state of Florida, are also currently taking action against phony debt relief schemes that are victimizing mortgage holders in addition to student loan debtors. In one case, the married owners of three different businesses settled the complaint with the FTC by agreeing to be barred from offering debt relief services. The problem is that there are so many more out there, and it can feel as if when one is taken out three more step in to its place.

Don’t get Burned!

The biggest sign of the scam is being asked to pay a fee upfront for services that have not even been rendered. I understand completely how being mired in debt can make reasonable people do desperate things. However, under no circumstances should you ever give anyone any power of attorney whatsoever. Equally, under no circumstances should you ever give any private financial information or your Social Security number to anyone over the phone, or over the computer. Doing so not only exposes you to fraud, but to identity theft.

You Have Options

Stop, take a deep breath, and give us a call. Your initial consultation is absolutely free in our West Palm Beachor Fort Lauderdale office. We can scam proof you and help you get real solutions to your debt problems.