Student Loan Company Ordered to Stop Doing Business in Kentucky

State AGs  •  Student Loans  •  UDAP/UDAAP

On September 27, 2016, the Kentucky Attorney General announced that on September 15, 2016, a Franklin Circuit Judge ordered a Florida-based student loan company to cease all operations in Kentucky.  The Attorney General’s lawsuit was filed after the Attorney General launched an investigation “into the company’s potentially misleading college loan forgiveness claims aimed at Kentucky consumers for large fees,” and alleged that the student loan company violated Kentucky debt adjustment statutes and the Kentucky Consumer Protection Act’s prohibition on unfair, false, misleading, or deceptive practices.  Specifically, the lawsuit alleged that the company operated as an unregistered debt adjuster and falsely represented that it could obtain forgiveness of consumers’ loans.  The Judge’s order “prevent[s] the company from soliciting or contacting citizens about student loans, and from entering into contracts or attempting to collect payments from them.”

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