The Federal Trade Commission has taken action against a student loan debt relief scheme that is accused of fraudulently extracting more than $20.3 million from consumers. This marks the first case brought under the FTC’s new Impersonation Rule, which went into effect in April and aims to combat scams involving the impersonation of government agencies and businesses.
The FTC has filed a complaint against the defendants and a federal judge has granted a temporary restraining order that puts a halt to the scheme and frozen the assets of the defendants.
The Background: Since at least June 2021, California-based Panda Benefit Services and its various affiliated companies — including Prosperity Benefit Services, Clarity Support Services, Pacific Quest Services, Prosperity Loan Services, Public Processing Services, Quick Start Services, Select Student Services, and Signature Processing Services — allegedly engaged in deceptive practices, according to the FTC. The operators of these companies, Christopher Hanson, Eduardo Martinez, Emiliano Salinas, and Melissa Salinas, allegedly preyed on consumers struggling with student loan debt by falsely promising loan forgiveness and significant reductions in loan payments.
The FTC claims the defendants:
- Falsely guaranteed loan forgiveness to consumers who paid for their program
- Promised significant reductions in loan payments
- Falsely claimed to take over servicing of consumers’ student loans
- Misrepresented affiliation with the Department of Education
The scheme allegedly used urgent mailers with language like “FINAL NOTICE” and promises of “complete loan forgiveness” to entice consumers to call. Telemarketers then convinced consumers they could obtain loan forgiveness in a much shorter timeframe than legitimate federal programs offer.
In addition to the Impersonation Rule, which provides provides the FTC with stronger tools to combat scammers who impersonate government agencies or businesses, the defendants are accused of violating the FTC Act, the Telemarketing Sales Rule, and the Gramm-Leach-Bliley Act.
