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Karl A. Racine
Office of the Attorney General for the District of Columbia
 

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AG Racine Wins Judgment for More Than $425K From Company Running Student Loan Debt Relief Scam

Monday, December 4, 2017
Court Orders Student Aid Center to Pay Full Restitution to Borrowers, $233K in Penalties

Contact:
Rob Marus, Communications Director: (202) 724-5646; [email protected]
Marrisa Geller, Public Affairs Specialist: (202) 724-5448; [email protected]


WASHINGTON, D. C. – Attorney General Karl A. Racine announced today that his office obtained a judgment for more than $425,000 in restitution and civil penalties from a company that deceived student borrowers into paying fees for services they could have obtained for free. The Superior Court of the District of Columbia ordered the company, Student Aid Center, Inc., to repay 233 District consumers for all fees the company had unlawfully collected, which total $192,824.95. The court also permanently barred the company from misleading consumers and charging up-front fees for student loan debt relief services.

In addition, the court also ordered Student Aid Center to pay $233,000 as a civil penalty.

“We will not tolerate scammers preying on District residents who worked hard to get an education and are now struggling to repay their student loans,” said Attorney General Racine. “There are many free resources available to make repaying student loans easier, and consumers should be skeptical of any student loan debt relief company that charges advance fees. We will continue to aggressively pursue companies like this one that take advantage of our residents.”

Attorney General Racine previously won a judgment against Student Aid Center, Inc. and the company’s owners, Ramiro Fernandez-Moris and Damien Alvarez, for unlawfully marketing student debt relief services to District consumers — including services that borrowers can get for free from the U.S. Department of Education. The court found the company and its owners liable for misrepresenting the company’s services and unlawfully charging fees of between $600 and $1,000 in advance, while consumers received little in return.

“This win for consumers comes after hard work by our consumer-protection team, and I’d particularly like to thank Office of Consumer Protection Director Phil Ziperman and Assistant Attorney General Ben Wiseman for their excellent legal work in this case,” Attorney General Racine said.

A copy of the final judgment is attached. Student Aid Center, Inc. has also been sued by the attorneys general of Florida, Kentucky and Washington state, and by the Federal Trade Commission.

Student Loan Resources
Borrowers with questions about their student loans should visit the Office of the Attorney General (OAG) Student Loan Resource Page. It provides District residents with free resources about repayment options and up-to-date information about how to manage student loan debt – including information about how to avoid student loan scams. OAG’s Student Loan Resource Page is available at oag.dc.gov/studentloans.

Consumers with complaints against Student Aid Center, other debt-relief scams, or any other consumer issue can contact our Office of Consumer Protection at (202) 442-9828, by sending an e-mail to [email protected], or online using our Consumer Complaint Form.