The Federal Trade Commission (FTC) continues its rigorous efforts against fraudulent schemes targeting student loan borrowers. Recently, a federal court intervened to stop operations and freeze the assets of Superior Servicing, a Nevada-based entity accused of misleading consumers by falsely claiming affiliations with the Department of Education. This decisive action highlights the FTC’s commitment to protecting financially vulnerable individuals from deceptive practices.
Historically, the FTC has aggressively pursued actions against similar fraudulent activities. In a prior case, the commission successfully halted operations of USA Student Debt Relief, which had also falsely represented connections with the Department of Education. Such consistent actions demonstrate a pattern of aggressive enforcement by the FTC to safeguard consumers against deceptive debt relief schemes.
What Led to the Court’s Intervention?
The intervention followed an FTC complaint against Superior Servicing and its operator Dennise Merdjanian. The U.S. District Court for the District of Nevada issued a temporary restraining order and preliminary injunction against the company. These measures were taken to address allegations that the defendants violated multiple legal provisions, including the Impersonation Rule and the Telemarketing Sales Rule, by promising debt relief services that were never delivered.
How Did the Scheme Allegedly Operate?
The FTC accused the defendants of collecting over $10 million by falsely promising student debt relief and forgiveness. Consumers were left deeper in debt while the operators allegedly retained the funds. This case underscores the need for consumers to be vigilant and cautious of entities claiming official affiliations without verification.
“The defendants promised consumers student debt relief and forgiveness but gave them virtually nothing,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, commented. “The FTC will continue taking decisive action against those who prey on Americans with student debt.”
Previously, the FTC also addressed a similar case involving USA Student Debt Relief. This occurrence involved misrepresentations of government affiliations, resulting in millions of dollars being fraudulently taken from consumers. The FTC’s actions in both cases were consistent with its aim of preventing deceptive practices in the student loan sector.
Efforts like these by the FTC provide vital protection for student loan borrowers against scams. The freeze on assets and court orders against companies like Superior Servicing serve as deterrents to potential fraudsters. Consumers are reminded to verify the credentials and legitimacy of debt relief services, particularly those that claim affiliation with government programs. Continuous vigilance and prompt legal actions remain crucial in safeguarding consumers from fraudulent schemes in the debt relief landscape.
