Student Loan Debt Relief Operation Allegedly Bilked More Than $28 Million From Thousands of Consumers in the United States by Falsely Promising to Reduce Consumer Debt

On February 7, 2018, the Federal Trade Commission announced that it has charged a student loan debt relief operation with bilking more than $28 million from thousands of consumers throughout the United States by falsely promising that consumers’ monthly payments would go towards paying off their student loans.

According to the FTC, the defendants, American Financial Benefits Center, also doing business as AFB and AF Student Services; AmeriTech Financial; Financial Education Benefits Center; and Brandon Demond Frere, sent personalized mailers to consumers falsely claiming they were eligible for federal programs that would permanently reduce their monthly debt payments to a fixed low amount or result in total loan forgiveness.

The FTC’s complaint notes that, although the Department of Education and state government agencies administer loan forgiveness and discharge programs, none of the programs guarantees a fixed, reduced monthly payment for more than one year, and most people do not meet the programs’ strict eligibility requirements.

Allegedly, the defendants charged up to $800 in illegal up-front fees, purportedly to enroll consumers in a federal loan assistance program. The defendants also charged a $100-$1,300 advance fee for enrollment in a “financial education” program and an additional monthly $49-$99 membership fee for the life of the loan, which typically is 10-25 years. Purportedly, this financial education program provided consumers access to various resources unrelated to consumers’ student loans, such as “Key Ring & Luggage Protection,” “Everyday Grocery Savings,” “Auto Buying Service and Maintenance Discounts,” “Financial Calculators,” “medical and wellness discounts,” and “Access to Dozens of Informational & Useful Web links.”

Consumers, according to the FTC, were tricked into believing their monthly payments were going toward paying down their student loans. Although consumers were sending money to the defendants, none of those payments went toward paying off their student loans, and in some instances the consumers’ loan balances instead accrued interest. The defendants often refused to provide refunds or returned substantially less than what people paid.

The defendants are charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule.

This is the eighth action the FTC has taken in Operation Game of Loans, the first federal-state law enforcement initiative targeting deceptive student loan debt relief scams.


Kehoe Law Firm, P.C.