The Federal Trade Commission (FTC) has successfully ended a $10 million student loan debt relief scheme perpetrated by Nevada-based company, Superior Servicing.
A federal court has placed Superior Servicing under a temporary restraining order and frozen its assets following an FTC lawsuit in 2023.
The company was alleged to have made false claims of affiliation with the U.S. Department of Education, promising services such as loan consolidation, reduced interest rates, reduced monthly payments, or loan forgiveness.
Superior Servicing operators reportedly collected up to $899 as initial payments from borrowers, in addition to monthly payments.
Since January 2023, Superior Servicing has been accused of violating the FTC’s Impersonation Rule by making these false claims through telemarketing calls and personalized mailers to borrowers.
According to the FTC, the company falsely claimed to work with or be affiliated with the Department of Education and, in some cases, told borrowers they could stop making payments toward their existing loan servicers.
“The defendants promised consumers student debt relief and forgiveness but gave them virtually nothing, keeping over $10 million for themselves and leaving consumers deeper in debt,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
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