ABQ Journal: Senators seek probe of student debt relief firms

A scathing National Consumer Law Center report on education debt relief companies prompted 23 Democratic U.S. senators – including New Mexico’s – on Wednesday to ask federal officials to investigate the firms.

The report, issued June 19, contends private companies are using deceptive practices – such as charging for services that the government provides for free and mischaracterizing federal government loan service programs as their own – to entice already cash-strapped debtors to spend more money than required. The report found that private companies are charging up to $1,600 upfront and $20 to $50 in monthly fees to participate in free federal repayment programs.

The report also accused student loan debt relief companies of failing to safeguard consumer financial information and possibly violating the Credit Repair Organizations Act and the Telemarketing Sales Rule by requiring payment before providing any assistance.

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