Borrowers Cheated Out of $12 Million

Borrowers Cheated Out of $12 Million
  • Scammers are targeting Americans with student loan debt. 
  • Consumers have been bilked out of millions of dollars.
  • Three companies were recently accused of cheating people out of more than $12 million.
  • The FTC has sued the companies.

( – In August 2022, President Joe Biden announced his administration was forgiven either $10,000 or $20,000 in loan debt for students who met certain financial parameters. The policy is currently being held up in court as Republican states and other groups fight it. However, that’s not the only problem.

The announcement from the president paved the way for a significant rise in scams. Fraudsters are taking advantage of students’ vulnerability. Federal officials recently reported they caught two schemes that began long before Biden’s announcement but not before they were able to steal millions.

Major Announcement

On May 8, the Federal Trade Commission (FTC) announced it put an end to two student debt relief scams that stole millions from victims. The three companies, SL Finance LLC, SLA Consulting Services Inc., and BCO Consulting Services Inc., reportedly used “deceptive claims about repayment programs and loan forgiveness that did not exist.” Additionally, the companies are accused of lying and saying they were affiliated with the Department of Education, telling the victims that the money they paid was being applied to their loan balance.

SL Finance

A lawsuit was filed on April 24 against SL Finance LLC and its owners, Michael Castillo and Christian Castillo, alleging the company lied to borrowers, many of whom were low-income, and said they worked with the Department of Education and also administered a pandemic-related student debt relief program.

In the filing, the FTC stated SL Finance did not “seek or deliver loan forgiveness, loan repayment plans, or even a reduced loan balance.” The scam has been going on since at least May 2019. In that time, the defendants allegedly collected roughly $6 million from their victims, even using telemarketing calls to reel them in.

The FTC also accused the defendants of violating the National Do Not Call Registry, calling more than 100,000 numbers that were supposed to be off-limits.

BCO Consulting Services and SLA Consulting Services

The second scheme allegedly involved the two companies above and their owners. The FTC’s lawsuit alleges the scam dated back to at least August 2019. They’re accused of stealing at least $6.5 million from people. Like the other scam, the companies reportedly used telemarketers to contact their victims.

The FTC alleges the companies promised the money they paid would go toward paying down their student loan balances. They also purported to be connected to the Department of Education. The victims paid between three and six monthly payments and were told their “loans [would] be forgiven either directly upon payment of the initial installments” or after a series of payments.

Of course, in both schemes, the student loan forgiveness the companies allegedly promised never came to pass. President Biden’s administration has implored Americans to report the crimes if they are scammed.

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