Federal Trade Commission Sends More than $822,000 to Students Deceived by Student Advocates’ Debt Relief Scam

The Federal Trade Commission is sending 14,521 checks totaling more than $822,000 to borrowers who lost money to a student loan debt-relief scheme that operated under the name Student Advocates.

Consumers who receive checks should cash them within 90 days, as indicated on the check. Recipients who have questions about their refund should call the refund administrator, JND Legal Administration, at 877-540-0989. The Commission never requires people to pay money or provide account information to get a refund.

In September 2019, the FTC filed a complaint against a student loan debt-relief scheme and the financing company that assisted them. The FTC alleged that the operators of Student Advocates, assisted by Equitable Acceptance Corporation, charged illegal upfront fees that they falsely claimed went toward consumers’ student loans. The defendants steered customers into high-interest loans to pay these fees. The FTC also alleged that the defendants made false promises that their services would permanently lower or even eliminate consumers’ student loan payments and debt balances. None of the money collected by the defendants was paid toward consumers’ student loans.

At the time the FTC filed its complaint, it also announced a stipulated final order with Equitable Acceptance Corporation that banned the company from assisting debt-relief services and violating the Telemarketing Sales Rule. The order also prohibited Equitable Acceptance from collecting any further payments from consumers who purchased these debt-relief services and required the company to pay monetary relief.

After more than a year of litigation, in May 2021, the FTC announced a stipulated final order with Student Advocates that banned the company from providing debt relief service, prohibited them from collecting further payments from consumers who purchased their debt relief services, and required them to pay additional monetary relief.

The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of refunds in FTC cases. In 2021, Commission actions led to more than $472 million in refunds to consumers across the country, but these refunds were the result of cases resolved before the U.S. Supreme Court ruled in 2021 that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the Commission’s ability to get money back for consumers.