“Debt settlement companies, which offer to help borrowers lower their monthly loan payments for a hefty upfront fee, have long been fraught with problems. But federal and state regulators are spotting new instances of abuse as the companies shift away from their traditional targets — credit card and mortgage debt — to zero in on student loans. The companies are coming under fire for potentially questionable tactics.
“Illinois is … the first state to bring legal action against debt settlement companies in connection with their student loan practices, contending in two separate lawsuits that Broadsword Student Advantage and First American Tax Defense duped vulnerable borrowers into paying for help that never arrived.”
For the complete story, see the New York Times article Companies That Offer Help With Student Loans Are Often Predatory, Officials Say.
For the Illinois attorney general’s press release about the cases, click here.