The Attorney General of Minnesota has reached a settlement with a student loan debt relief company that was accused of falsely promising student loan forgiveness which will see the company repay all the money it collected from customers in the state and cease operations in Minnesota until it registers as a debt settlement service provider.
The company, Capital Student Loan Center, based in Stanton, Calif., was accused of charging customers initial and monthly fees for enrolling them in federal repayment programs, which the customers could have done for free on their own. Collecting upfront fees before performing debt settlement services is also illegal under Minnesota law. The company was also accused of operating with a proper license in Minnesota. The company is accused of violating a number of Minnesota laws, including the Debt Services Settlement Act, the Prevention of Consumer Fraud Act, and the Uniform Deceptive Trade Practices Act.
“Minnesotans take out student loans so they can get an education that will help them better afford their lives,” said Keith Ellison, the Attorney General of Minnesota, in a statement. “When bad actors take advantage of Minnesotans who took out these loans in good faith, we will come after them.”
The company will repay more than $18,000 that it received from customers in Minnesota under the terms of the settlement. The company denied it violated state law in the settlement. A civil fine of $50,000 was stayed but will be ordered to be repaid if any of the terms of the settlement are violated.
