, alleging the companies used deceptive claims about repayment programs and loan forgiveness that didn’t exist.
The FTC said the companies falsely claimed to be or be affiliated with the Department of Education, telling students the illegal payments would count toward their loans. The court has temporarily halted the schemes and frozen the assets of the three companies.Samuel Levine, director of the agency’s Bureau of Consumer Protection, said fraudsters have descended on students in dire need of financial relief.
The FTC complaint against Garden Grove-based SL Finance and owners Michael and Christian Castillo alleges the company lured students — many of whom are low-income borrowers saddled with tens of thousands of dollars of student debt — into paying hundreds of dollars in exchange for false promises of loan forgiveness.
The federal agency said the scheme relies heavily on false and misleading representations, often made during an initial call between a telemarketer and a customer. Students were frequently told the debt-relief programs were part of the federalThe complaint against SL Finance alleges that since May 14, 2019, the company collected hundreds of dollars per student from thousands of students for a total of around $6 million.