SANTA ANA (CNS) - A Santa Ana federal judge ruled in favor of the Federal Trade Commission, stopping a student loan debt relief scheme that bilked more than $23 million from thousands of consumers with false claims that it would service and pay down their student loans, it was announced today.
In its ruling Friday, the court found that the defendants, doing business as Federal Direct Group, Mission Hills Federal, The Student Loan Group and National Secure Processing, lured victims with false promises to pay down student loans and lower monthly payments. Student loan payments were usually diverted to the defendants, according to the FTC.
U.S. District Judge James V. Selna ordered that the individual defendants -- Mazen Radwan, Rima Radwan, Dean Robbins and Labiba Velazquez -- along with their companies be permanently banned from the telemarketing and debt relief businesses. The ruling also imposes a $27.6 million judgment against the defendants.
“Debt relief companies can't collect advance fees or masquerade as federal student loan servicers,'' Andrew Smith, director of the FTC Bureau of Consumer Protection, said last year. “Anyone asking for upfront fees to help with student loan debt is likely a scammer, and consumers should hang up and alert the FTC.''
The FTC found that the defendants obtained consumers' student loan credentials, such as their username and password used to log in to U.S. Department of Education websites, to change victims' contact information, effectively hindering or entirely preventing loan servicers from communicating with consumers.
Many victims went months or years before discovering that their student loans were not being repaid, according to the FTC.
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