Gov. Cuomo's New Student Protection Unit Issues Subpoenas to 13 Private Debt Relief Companies
Gov. Andrew M. Cuomo's new Dept. of Financial Services Protection Unit issues subpoenas to 13 private debt relief companies.
As part of his 2014-15 Executive Budget, Gov. Andrew M. Cuomo established a new Dept. of Financial Services Protection Unit to safeguard New York’s students from consumer abuse and to help them make informed and sound financial decisions.
Yesterday, Cuomo announced the first official action taken by the newly formed unit in issuing subpoenas to 13 different student debt relief companies as part of an investigation into potential deceptive advertising, the imposition of improper fees and other consumer protection problems.
“The rising tide of student loan debt has made it more important than ever that we put in place strong consumer protections for New York's students,” Governor Cuomo said. “Any company trying to sell students a raw deal using misleading or deceptive practices should know that we’ll continue to work vigilantly to root out consumer abuse.”
Student debt relief companies often charge high fees to assist students with consolidating multiple loans into a single loan. However, the same programs that these companies offer students are often available free of charge through the U.S. Dept. of Education. The investigation springs out of concern that private companies are charging high fees for simply directing students into the free government programs. The private companies may also be making overinflated claims about the results they can achieve.
The National Consumer Law Center recently released a report detailing these and other disturbing practices within this industry.
Superintendent of Financial Services Benjamin M. Lawsky said: “Socking students with high fees for a service that is already available for free through the federal government is an immediate red flag. The Cuomo Administration's new Student Protection Unit will vigorously investigate this industry and any other potential violations of students’ consumer protection rights.”
The subpoenas issued by the governor’s protection unit called for disclosure of advertising materials, contracts, consumer disclosures and fee schedules from the following companies:
- AlphaOne Student LLC
- Brelvis Consulting, LLC d/b/a The Student Loan Help Center
- Consumer Protection Counsel, P.A.
- Debt Be Gone, LLC
- Default Student Loan Assistance, LLC
- Interactiv Education, LLC d/b/a Direct Student Aid, Inc.
- Omega Capital Advisory LLC d/b/a Federal Student Aid Relief
- Student Consulting Group, Inc.
- Student Loan Relief Center, Inc.
- Student Loan Service
- US Student Loan Helpers, Inc.
- US Student Loan Services, Inc.
- Xtreme Products LLC d/b/a USA Student Loans
Consumers with complaints about student debt relief or other potential abuses can file a complaint with the Cuomo’s Student Protection Unit by contacting the Dept. of Financial Services Consumer Hotline at (212) 480-6400 or (800) 342-3736. The Student Protection Unit has also issued a consumer alert on the DFS website with information on student debt relief companies.
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[Source and Photo: Gov. Andrew M. Cuomo’s Office]