Student loan debt refief scams proliferate
Many recent Florida college graduates are attempting to deal with their burden of student loan debt, and they are sometimes finding themselves preyed upon by unethical companies that promise debt relief but deliver only more economic harm. These organizations skirt the law, sometimes straying into fraud in their attempt to take advantage of needy consumers.
These firms habitually lure customers in with targeted ads on search engines. They use government logos and other misleading information to masquerade as an official site. One of their most common techniques is to promise enormous reductions in the student loan debt through the utilization of their exclusive techniques. They attempt to obscure the fact that the best way to handle debt relief is through the Department of Education, which provides the service for free. Instead, they dun the unsuspecting customer with any number of up-front fees and service charges. These services the debt relief company promises can be easily obtained at no cost to the debtor, but these firms charge exorbitant prices and offer conflicting information in an attempt to baffle the consumer.
Critics claim that this practice is largely unregulated, though government agencies have been working to take control. The Consumer Financial Protection Bureau has been watching a number of firms that engage in questionable debt relief practices such as these and has filed a few lawsuits against these companies.
One realistic solution is to exercise extreme caution. Another may be to meet with a lawyer in order to determine what methods of debt relief may be available. Chapter 13 may be a way for eligible debtors to reduce the monthly amount of their student loan payments during the pendency of the court-approved repayment plan that is a feature of that chapter.
Source: Forbes, “College Loans: How To Avoid ‘Relief’ Scams”, John Wasik, May 8, 2016