The Federal Trade Commission (FTC) has charged a debt relief company with falsely representing to financially distressed homeowners and student loan borrowers that it would help get their mortgages and student loans modified. At the FTC’s request, a federal court has temporarily halted the operation. The FTC seeks to permanently stop the alleged illegal practices and obtain refunds for affected consumers.
According to the FTC’s complaint, Good EBusiness LLC deceptively marketed home loan modification services and illegally charged an advance fee of 1,000 to $5,000. The agency alleges that the company falsely claims that it can lower monthly mortgage payments, reduce mortgage interest rates usually within a few months, and falsely promise full refunds if they fail. The FTC’s complaint also alleges that Good EBusiness, using the names Student Loan Help Direct and Select Student Loan; Select Student Loan Help LLC; Select Document Preparation Inc.; illegally charged a fee of $500 to $800 for student loan relief services.
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Teaching Suggestions
- Ask students to make a list of sources they may rely on for help when they are overburdened with debt problems.
- What questions should you ask in finding the best credit or debt counselor?
Discussion Questions
- Which federal consumer credit law regulates debt collection practices and what are its major provisions?
- What options of solving credit and debt problems are available to individuals?
Melissa Hart
Focus on Personal Finance, 7e 