Federal Trade Commission sends over $2 million to students harmed by debt relief scam

The Federal Trade Commission is sending 22,817 checks totaling more than $2 million to borrowers who lost money to a student debt relief scam that operated under the name Student Debt Doctor.

Consumers who receive checks must cash them within 90 days as indicated on the check. Recipients who have questions about their refund should call the refund administrator, Analytics, at 844-916-3240. The Commission never requires people to pay money or provide account information to get a refund.

In late 2017, the FTC sued Student Debt Doctor and its owner, Gary B. White Jr., alleging the company deceived consumers into believing they could receive immediate relief from monthly loan payments and full loan forgiveness in exchange for a large upfront fee. Defendants also told students their loans were in forbearance when they weren’t, causing consumers to neglect required payments and suffer lower credit scores. In reality, the FTC alleged that the vast majority of consumers lost their hard-earned money but received little or no relief, and some borrowers ended up owing more.

In December 2018, the FTC announced a stipulated final order prohibiting White and his company from participating in the debt relief industry and making false claims regarding financial products or services.

The United States Supreme Court ruled in 2021 that the Commission does not have the authority under section 13(b) to seek monetary relief in federal court in the future. The money being returned to consumers today comes from settlements that were reached before the Supreme Court decision. The Commission urged Congress to restore the Commission’s ability to collect money for consumers.

The Commission’s interactive dashboards for reimbursement data provide a state-by-state breakdown of Commission reimbursements. In 2020, the Commission’s actions reimbursed more than $483 million to consumers across the country.

Aurora J. William