BOSTON – Attorney General Maura Healey today announced that an unlicensed finance company has been permanently banned from selling student loan debt relief services in Massachusetts and will provide $100,000 in restitution and $340,000 in loan relief to more than 600 student borrowers to settle allegations that the company violated state laws.
The AG’s complaint, filed today along with a consent judgment in Suffolk Superior Court, prohibits Equitable Acceptance Corporation (EAC) from making misrepresentations related to financing products or services, bars its collection on any active student loan debt relief accounts in Massachusetts, requires the company to repair the credit of all affected Massachusetts borrowers, and provides for a payment of $100,000 to the Commonwealth.
“Equitable Acceptance Corporation scammed student borrowers desperate for relief,” said AG Healey. “This settlement provides significant relief to Massachusetts borrowers who were victimized by this company’s practices and permanently prohibits EAC from engaging in this conduct again.”
The AG’s Office alleges EAC violated the state’s Consumer Protection Act by providing high-interest loans to student borrowers looking to finance fees charged by so-called student loan “debt relief” companies for “documentation preparation services.” In reality, the services provided by these student loan debt relief companies involved little more than preparing and submitting forms for these borrowers. The complaint also alleges EAC violated the Massachusetts Truth in Lending Act by misrepresenting its loans as revolving credit plans when they were actually “closed end” loans, and that the company did not disclose the true cost and terms of these loans.
Student loan “debt relief” companies often advertise on the internet and market student loan “forgiveness.” They typically induce borrowers to pay hundreds of dollars in unnecessary fees to get federal student loans out of default, apply for federal consolidation loans, or enroll in income-driven repayment plans. Additionally, many of these companies falsely imply they are affiliated with the federal government or can provide special access to repayment, refinance or loan forgiveness programs.
AG Healey has taken a number of enforcement actions against student loan “debt relief” companies. The Attorney General previously reached settlements with United Advisor’s Group LLC, U.S. Direct Student Loan Services, Student Loan Service.US, Student Loan Processing.US and Direct Student Aid.
Federal student loan borrowers do not need to pay private companies to resolve defaulted loans, enroll in more affordable repayment plans, submit a federal loan consolidation application, or apply for discharges and loan forgiveness. The U.S. Department of Education offers these programs and opportunities directly to borrowers for free at www.studentloans.gov.
Addressing fraud and abuse in student lending has been a top priority for AG Healey, whether taking predatory schools to court, changing the practices of student loan servicers, going after unlawful student loan “debt relief” companies, or helping student borrowers find more affordable repayment solutions. Massachusetts residents who have had problems with student loan “debt relief” companies or who want help with their student loans are urged to contact the Attorney General’s Student Loan Assistance Unit at 1-888-830-6277 or visit www.mass.gov/ago/studentloans for free help.
This investigation was handled by Assistant Attorney General Samantha Shusterman and Deputy Division Chief Shennan Kavanagh of the AG’s Consumer Protection Division, with assistance from Investigator Anthony Crespi of the AG’s Civil Investigations Division.