A consumer watchdog says over 7,100 student-loan borrowers will receive $3.5 million in refunds after a debt-relief firm illegally charged them up to $699 to reduce their federal amounts.
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Student Loan Refund
In a major development, over 7,100 student-loan borrowers are slated to receive a total of $3.5 million in refunds. This refund follows the accusations made against Timemark, a debt-relief company, for unlawfully charging fees of up to $699 to reduce the federal loan balances of these borrowers.
In its role as a consumer watchdog, the Consumer Financial Protection Bureau (CFPB) has exposed this fraud and taken swift action to ensure justice is done.
Uncovering the Loan Scam
Student debt relief firm Timemark Solutions has been accused by the Consumer Financial Protection Bureau of breaking the Telemarketing Sales Rule.
This violation involved charging borrowers illegal advance fees, despite the fact that the services provided by the Education Department were already available free of charge.
Through telemarketing campaigns conducted from 2016 to October 2019, Timemark convinced individuals with federal student loans to pay fees ranging up to $699.
These fees were purportedly for services such as filing paperwork for loan consolidation, forgiveness, or income-driven repayment plans.
The Violation of Telemarketing Sales Rule
The Telemarketing Sales Rule makes it illegal for telemarketers to ask for or accept money for debt relief services until the customer has made at least one payment in accordance with the revised terms.
Timemark went against this regulation by charging borrowers money so soon after they joined the programme.
CFPB’s Settlement and Refund Process
The CFPB reached a settlement with Timemark in July 2020, leading to the upcoming issuance of refund checks. Epiq Systems, contracted by the agency to facilitate payments, will administer these checks.
If a borrower who is entitled to a refund does not get a cheque, they can file a claim at CFPB-Timemark.org. For any queries regarding the refunds, borrowers can contact info@cfpb-timemark.org or call 866-991-0913.
Crackdown on Fraudulent Student-Debt-Relief Companies
Several companies that claim to help students with their debt have been under intense scrutiny from the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) in recent years.
Five companies were charged by the Consumer Financial Protection Bureau in December of illegally charging borrowers for services that were previously being supplied for free by the Department of Education.
Similarly, in June, the FTC accused another company of falsely promising loan forgiveness while retaining customers’ payments.
Scam Warnings and Post-Supreme Court Ruling
With the recent Supreme Court decision to overturn President Joe Biden’s student-loan-forgiveness plan, there is an increased risk of scams targeting borrowers. In response, the FTC has issued a warning to borrowers, advising them to be cautious.
They recommend never agreeing to pay for assistance with their student loans, avoiding sharing their Federal Student Aid login information, and exercising skepticism toward anyone claiming to offer debt relief, even if they assert they work with the Education Department.
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Student-loan borrowers $3.5 Mill Refund
Conclusion Student Loan Refund
The CFPB’s crackdown on Timemark Solutions, a debt-relief company, brings justice to over 7,100 student-loan borrowers who were unlawfully charged fees to reduce their federal balances.
With the upcoming distribution of $3.5 million in refunds, borrowers can regain confidence in the system.
The CFPB’s efforts to uncover fraudulent practices in the student-debt-relief industry reflect its commitment to protecting consumers and ensuring fair treatment in the financial sector.
Borrowers are urged to remain vigilant against scams and follow the guidelines provided by the FTC to safeguard their interests.
FAQs about Student-Loan Borrowers Refunds
How many borrowers are eligible for refunds?
Over 7,100 student-loan borrowers are eligible for refunds.
How much money will borrowers receive in refunds?
The total amount to be refunded to borrowers is $3.5 million.
How did Timemark violate the Telemarketing Sales Rule?
Timemark violated the Telemarketing Sales Rule by charging advance fees before borrowers made any payments using the new arrangement.
What should borrowers do if they don’t receive a refund check?
If a borrower expects a refund but does not get a cheque, they can file a claim with the Consumer Financial Protection Bureau (CFPB) via CFPB-Timemark.org.
How can borrowers contact the CFPB for refund-related inquiries?
For any questions or concerns about the refunds, borrowers can reach out to info@cfpb-timemark.org or call 866-991-0913.
How can borrowers protect themselves from student loan scams?
Borrowers can protect themselves by avoiding payment for loan assistance, not sharing their Federal Student Aid login details, and being skeptical of anyone claiming to offer debt relief, even if they mention the Education Department.
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