$95M distributed to consumers harmed by fraudulent student loan debt relief

In a joint prosecution with the Consumer Financial Protection Bureau (CFPB) and the states of Minnesota and North Carolina, newly elected Los Angeles City Attorney Hydee Feldstein Soto’s office will distribute over $95 million in restitution to 87,285 consumers nationwide who were allegedly harmed by fraudulent student loan debt relief companies, namely Consumer Advocacy Center Inc., doing business as Premier Student Loan Center (Premier).

This will include more than $7.1 million to 6,546 California consumers who made claims against Premier, which operated its student loan debt relief enterprise at locations throughout LA and Southern California through multiple corporate entities and under multiple names, including co-defendants True Count Staffing Inc., doing business as SL Account Management; and Prime Consulting LLC, doing business as Financial Preparation Services.

The LA City Attorney’s Office, under the leadership of Mike Feuer and on behalf of the People of the State of California, sued Premier and related companies and individuals alongside the CFPB, and the states of North Carolina and Minnesota. The plaintiffs also obtained an asset freeze and a preliminary injunction prior to the restitution just announced.

“Student loan debt continues to be a crushing burden for too many Angelenos,” Soto said. “My office will prosecute these types of claims using every tool at our disposal and continue to help victims get their money back. This announcement is a continuation of the strong consumer protection work that the Los Angeles City Attorney’s Office has become known for throughout California and the nation. We will never hesitate to step-in and protect consumers.”

The lawsuit alleges that Premier violated states’ consumer protection statutes, as well as the federal Consumer Financial Protection Act of 2010 and the Telemarketing Sales Rule by making deceptive representations about Premier’s student loan debt relief services. Premier also allegedly charged and collected improper advance fees before consumers had received any adjustment to their student loans or made payments towards an adjusted loan. The lawsuit against Premier continues, with trial currently set for spring 2023.

CFPB has already started sending out redress checks to consumers who were allegedly harmed, and the City Attorney’s Office suggests that consumers visit the U.S. Department of Education’s Federal Student Aid website to learn about student loan repayment programs.