Defendants in Student Loan Debt Relief Scheme Banned from Industry in Settlement with FTC and Florida
Defendants posted positive online reviews of their services to appear as if customers wrote them
Under a settlement with the Federal Trade Commission (FTC) and the State of Florida, the operators of an alleged student debt relief and credit repair scam will be banned from those lines of business.
The stipulated final order resolves charges that the FTC and the State of Florida brought in April 2016 against Chastity Valdes and her companies, Consumer Assistance, Consumer Assistance Project, and Palermo Global.
According to the FTC, the defendants allegedly lured borrowers with false promises of "eliminating" their student loan debts and repairing their credit and then charged illegal up-front fees. The companies also allegedly posted positive online reviews of their services to appear as if customers wrote them.
The order also bars the defendants from misrepresenting endorsements, profiting from consumers' personal information, and failing to dispose of it properly. Further, the order imposes a judgment of more than $2.3 million, representing the amount of money consumers lost, which will be suspended upon payment of virtually all the companies' assets, totaling $4,500.
The full judgment will become due immediately if the defendants are found to have misrepresented their current financial condition.