US regulator refunds over $273,500 to victims of student debt relief scam

*The scammers, operating under the business name Manhattan Beach Venture, fraudulently charged consumers upfront fees of up to $1,400 each and deceived them in a phony scheme involving high-interest loans

Isola Moses | ConsumerConnect

For falling victims to the scam, the Federal Trade Commission (FTC) has announced that it is sending more than $273,500 in refunds to consumers defrauded in a student debt relief scheme in the United States (US).

ConsumerConnect gathered the scammers, who operated under the business name Manhattan Beach Venture, had charged unwary consumers upfront fees of up to $1,400 and tricked them into believing that the payment would go towards permanently lowering or eliminating their student loan payments in the country.

Consumers were then, signed up to finance the fee through a high-interest loan with third-party financier Equitable Acceptance Corporation, which the FTC said is another defendant in its action.

According to regulators, the ‘bad actors’ used a “persuasive” sales pitch by informing the consumers they qualified for a Federal programme that would allow their student loans to be either fully or partially forgiven, and that they could get a permanent reduction in their monthly payments.

The FTC stated: “When a Manhattan Beach telemarketer had an interested consumer on the phone, the telemarketer sent the person a contract via e-mail to sign electronically.

“If the consumer met Equitable Acceptance’s prescreening requirements for financing, the telemarketer also emailed the consumer a contract with Equitable Acceptance and directed the consumer to sign immediately.”

Consumers ended the call with a new monthly payment that they thought was going toward their student loans, the complaint alleged. Instead, the defendants pocketed the payments, agency report said.

The Commission has put a stop to the scheme and barred the defendants from selling any kind of debt relief product or service.

Consumers who were swindled into giving money to the scam operators will receive refund cheques, report said.

The agency said it would send cheques to 2,889 people, averaging about $95 each.

It is recalled that the country’s FTC earlier had warned of imposter scam targeting college students and staff in the US.

It was learnt the Commission at a time cautioned college students, professors, and staff members of institutions of learning in the country to look out for scammers impersonating Internal Revenue Service (IRS) officials.

The FTC also quoted reports about malicious actors’ sending phishing messages to consumers with “.edu” e-mail addresses in an attempt to collect sensitive personal and financial information.

The scheme starts with a scammer sending a message to the victim saying they have information about a tax refund.

Sometimes, the agency noted, the message has a subject line like “Tax Refund Payment” or “Recalculation of your tax refund payment.”

In the body of the e-mail, the scammer tries to get the victim to click on a link to submit an online form for their supposed refund.

It stated unfortunately, if the recipient clicked on the link and filled out any information on the next page, they would give away sensitive data such as their full name, address, Social Security number, date of birth, and other personal information that scammers could use for identity theft.

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