The US Federal Trade Commission and the Department of Justice are issuing more than $9 million in refunds to victims of a student loan debt scam.
The FTC announced on Tuesday that the money would be sent to more than 22,500 people who gave up to $800 in up-front fees and up to $99 in monthly membership dues to a company called Ameritech Financial.
According to a 2018 complaint, Ameritech misled as many as 40,000 borrowers about being eligible for programs that would greatly reduce their federal student loan payments or result in complete forgiveness.
One borrower said they were told $20,000 of their Pell Grant would be forgiven if they paid a $375 processing fee, while another claimed they were told their loans would be reduced by $10,000 in exchange for monthly payments.
The complaint also stated that Ameritech illegally obtained victims’ bank account, debit card or credit card information to withdraw hundreds of dollars in unlawful advance fees. It’s estimated Ameritech pocketed as much as $28 million from the scheme.
In 2019, Ameritech owner Brandon Frere pleaded guilty to two counts of wire and mail fraud. A year later, he was sentenced to 42 months in prison and banned from providing debt relief services.
“During a period of uncertainty for borrowers saddled with student loan debt, these defendants bilked consumers out of millions of dollars with junk fees and phony promises of loan forgiveness and lower monthly payments,” Samuel Levine, the director of the FTC’s Bureau of Consumer Protection, said in a statement. “We will continue the agency’s ongoing efforts to pursue scammers that target the tens of millions of Americans with student loan debt.”
Here’s what you need to know about the Ameritech student loan relief scam, including how payouts will work.
How will I receive payment from the FTC?
According to the FTC, 22,562 consumers will receive refunds, most in the form of a check in the mail. Checks should be cashed within 90 days of being received.
If the FTC doesn’t have someone’s address on file, a payment will be sent through PayPal.
Do I need to file a claim to receive a refund?
Recipients don’t have to file a claim to get their money.
“FTC court orders typically require the defendants to provide a list of customers, along with their contact information, and how much they paid,” according to the FTC website. “We use this information to send refunds.
In addition, the FTC said it never requires people to pay money or provide account information to receive a refund.
If you’ve been told you do, it’s likely a scam.
For more information
If you have questions about the case or your eligibility, you can contact the refund administrator, Rust Consulting, at 833-579-3126 or visit the FTC website.