Over $9 Million Is Being Refunded to Student Loan Scam Victims
Ameritech Financial pocketed as much as $28 million from tens of thousands of unsuspecting borrowers, the FTC says.
The FTC is issuing refunds to more than 22,500 people who fell victim to a student loan relief scam.
More than $9 million is being refunded to victims of a student loan debt scam, with the US Federal Trade Commission and the Department of Justice issuing the funds.
Payments will be sent to the 22,562 people who gave up to $800 in up-front fees and up to $99 in monthly membership dues to a company called Ameritech Financial, the FTC said Tuesday.
Ameritech misled as many as 40,000 borrowers about being eligible for programs that would greatly reduce their federal student loan payments or result in complete forgiveness, according to a 2018 complaint.
One borrower said they were told $20,000 of their Pell Grant would be forgiven if they paid a $375 processing fee, while another claimed they were told their loans would be reduced by $10,000 in exchange for monthly payments.
The complaint also stated that Ameritech would use a victim's bank account, debit card or credit card information to withdraw hundreds of dollars in unlawful advance fees. It's estimated the company pocketed as much as $28 million from the scheme.
In 2019, Ameritech owner Brandon Frere pleaded guilty to two counts of wire and mail fraud. A year later, he was sentenced to 42 months in prison and banned from providing debt relief services.
Scam artists have preyed on borrowers' confusion and uncertainty since student loan payments were paused in March 2020. With payments resuming in October, experts are warning consumers to be on the alert for a new barrage of scams.
Here's what you need to know about the Ameritech student loan relief scam, including how payouts will work.
How will I receive a refund payment from the FTC?
According to the FTC, 22,562 consumers will receive refunds, most in the form of a check in the mail. Checks should be cashed within 90 days of being received.
If the FTC doesn't have someone's address on file, a payment will be sent through PayPal.
Do I need to file a claim to receive a refund?
Recipients don't have to file a claim to get their money.
"FTC court orders typically require the defendants to provide a list of customers, along with their contact information, and how much they paid," according to the FTC website. "We use this information to send refunds."
In addition, the FTC said it never requires people to pay money or provide account information to receive a refund.
If you've been told you do, it's likely a scam.
For more information
If you have questions about the case or your eligibility, you can contact the refund administrator, Rust Consulting, at 833-579-3126 or visit the FTC website.