233 inquiries | Debt Relief Services - non-compliant with FTC Rule
(800) 688-9050
http://firststudentaid.com/
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F
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This business is not a member of Business Consumer Alliance. This fact does not disparage the company in any way.
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BCA's Summary and Analysis:
We have received no complaints against this company.
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Company Info
This company provides legal document assistant/preparation and debt relief services.
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Licensing
California law requires bill paying services, and pro-raters accepting money from clients to be disbursed to creditors on behalf of the debtor, to be licensed by the California Department of Business Oversight and file a $25,000 bond.To verify licensing, contact the California Department of Business Oversight (DBO) by writing to 1515 K Street, Suite 200 Sacramento, CA 95814-4052, by calling (916) 445-7205, (866) 275-2677 or (866) ASK CORP. Prorater licenses can be verified on-line, by accessing the DBO website at http://www.dbo.ca.gov. For businesses outside of California, please check with the agency that regulates this industry.
Agency: Federal Trade Commission (FTC)WashingtonDescription:
On October 13, 2017 the Federal Trade Commission filed a Complaint for Permanent Injunction and Other Equitable Relief alleging the company deceptively telemarketed their document preparation service by misrepresenting an affiliation with the Department of Education or consumers’ loan servicers, and that consumers who paid defendants an up-front fee were qualified for or approved to receive permanently reduced monthly payments or their student loans would be forgiven or discharged. The business and their affiliates used deceptive advertisements on Facebook and other social media that touted their ability to qualify, establish eligibility for, approve, or enroll consumers in loan forgiveness programs, when, in fact, only the Department of Education can qualify or enroll consumers in such programs. The complaint alleged the scheme charged up to $1000 in illegal upfront fees to consumers looking for student loan debt relief.
Details of the complaint and additional updates are available here.
On September 28, 2018, the company and its affiliates named in the October 13, 2017 FTC complaint agreed to a settlement with the agency. Under the settlement, the business is banned permanently from engaging in any type of debt relief activities and from making misrepresentations related to financial or any other products or services. They also agreed to pay $5.4 million in redress to affected consumers.
On September 30, 2019 the FTC sent 39,734 checks, averaging $136.48, to people who lost money.
Details of the settlement are available here.
Our experience with debt negotiating companies is that they attract customers with large credit card debt by claiming to be able to settle those debts for a fraction of their face value. They often claim that their services are more effective than those provided by credit counseling services and that they are a superior alternative to bankruptcy.Complaints on these type of companies allege that creditors continue to harass clients, fees and interest continue to accumulate, and the creditors are not contacted. Usually, creditors turn the claims over to collection agencies, file suit and pursue collection of the money owed to them. Debts are seldom settled, customer's credit is ruined, and many people are sued forcing them to seek bankruptcy protection. Typically, it is difficult to obtain refunds. These companies usually instruct their clients to stop paying their creditors. Some companies direct clients to make their payments to the debt negotiation company instead. They promise that when sufficient cash has been accumulated to offer a settlement to a creditor, they will do so. They go on to say that their program may take two or three years to complete. Most companies collect their fees upfront and generally the fees are based on some percentage of the promised savings. Other companies simply collect their fee and advise debtors to save their money to pay their creditors themselves. California law limits the amount of fees debt negotiators can charge, but by not collecting the money and distributing it to your creditors, companies can remove themselves from the limiting statutes and charge whatever they wish. What they are supposed to do for you while you’re saving up your money is to contact your creditors and inform them that they’re working with you, negotiate the amount to settle your debt, and ask them stop contacting you. Debtors may not realize that if their creditors do accept a negotiated settlement, the amount forgiven constitutes taxable income.For businesses outside of California, please check with the agency that regulates this industry.
We know of no other matter or practice relating to this company that may assist you in your consideration of this company.
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