The Federal Trade Commission recently swooped in and shut down A1 Docprep, Project Uplift Students, Bloom Law Group, Streamlined Marketing, Project Uplift Americam Home Shield Network, Keep Your Home USA, and Homan Ardalan.
The FTC claims in court documents that the companies operating together were engaged in deceptive student loan debt relief and mortgage assistance relief operations. The documents state, “Since at least May 2016, Defendants have operated an unlawful debt relief enterprise that preys on consumers with student loan debt. Defendants have lured consumers with text messages and telephone calls that falsely purport to be from the U.S. Department of Education (“ED”) offering time-limited participation in forgiveness programs. Defendants promise to reduce consumers’ monthly payments and eliminate all or a portion of their student loan debt through enrollment in student loan forgiveness or income-driven repayment programs. In many instances, however, consumers have discovered that Defendants failed to obtain debt forgiveness or monthly payment reductions. In fact, some consumers have owed more on their student loans after enrolling in Defendants’ program.
Since at least October 2015, Defendants also have operated a similar scheme in which they market mortgage assistance relief services to financially distressed homeowners. Defendants claim that they have a very high success rate, including, in some instances, that they have a 98% success rate, in obtaining mortgage loan modifications and preventing foreclosures, and that consumers will receive expert legal representation. In numerous instances, however, Defendants fail to obtain the promised loan modifications and do not provide any legal representation to consumers. In some instances, consumers’ homes have been foreclosed after consumers signed up for Defendants’ assistance with their mortgages.
In exchange for the promised student loan debt relief and mortgage assistance relief services, Defendants have charged illegal upfront fees of as much as $4,500.”
The action by the FTC follows a similar pattern of raids and takeovers of groups who engaged in problematic marketing efforts. The court document states, “To lure consumers into purchasing their purported student loan debt relief services, Defendants have engaged in two unlawful practices, making: (1) false claims that they are or are affiliated with the federal government, including the Department of Education; and (2) false promises to eliminate or reduce consumers’ student loan balances or monthly payments through loan forgiveness or other programs.
Defendants make outbound telemarketing calls and send texts to consumers to offer their services and convince student loan borrowers to sign up with the company. In some instances, consumers view the Defendants’ website or online advertising and call Defendants’ telemarketers for more information.
Defendants have claimed to be the Department of Education in their advertisements. For example, Defendants have left the following telephone message on consumers’ phones:
This message is from the Department of Education. In regards to Donald Trump becoming President, all programs for student loan forgiveness will be stopped immediately as soon as he takes office in January. In order for you to qualify, you must apply within the next 24 hours or you will not be able to have your student loan payment reduced. Please contact us at [toll free number]. The number again is [toll free number]. Once again, you must get involved within the next 24 hours. Thank you.
Defendants have also falsely represented to consumers that they are affiliated with Direct Loans. For example, one of Defendants’ email communications to one consumer bears the header: “William D. Ford Federal Direcr (sic) Loans.”
The student loan assistance efforts appear to have followed the false belief that selling document preparation services was going to be a safe way to mass market student loan help. This was an effort I warned readers about in 2013 in Student Loan Assistance Rescue Scams On the Rise – Buyer Beware.
The complaint filed by the FTC describes the same problematic behavior I’ve warned debt relief companies against. The ploy of burying stuff in a client agreement only to use it against the consumer later, is going to bit them.
The FTC said, “In many instances, Defendants have e-mailed consumers a link to a contract to sign electronically. Defendants typically have pressured consumers into quickly electronically signing the contract while the telemarketer is still on the phone. Buried in the contract document is language at odds with the statements in Defendants’ advertisements and telephone communications with consumers: “Client understands and acknowledges the fact that A1DocPrep is only a document preparation company and is in no way guaranteeing or promising consolidation;” and “A1 DocPrep is NOT affiliated in any manner with the Department of Education or any other academic or governmental entity.” In many instances, consumers were rushed through the contract and did not read the above language. In those instances where consumers read and asked Defendants about the contract’s statements that A1 is not the Department of Education, Defendants provided multiple reassurances over the telephone. In other instances, consumers did not sign the contract and discovered later that Defendants had signed their name electronically.”
And then it looks like the companies were still engaged in the last debt relief marketing wave of selling mortgage assistance. That’s so 2015.
The complaint says, “Defendants also have made false promises to obtain mortgage loan modifications for consumers through advertisements on websites and telephone calls to consumers.
For example, the homepage of one of Defendants’ websites, keepyourhomeusa.org, has listed a number of mortgage assistance relief benefits under “What We Have Achieved”:
I guess the companies never heard about Brookstone Law Group and others who were pitching similar benefits and were raided and closed.
The lawsuit is full of more details. You can read the complaint filed by the FTC here.
By the way, the Bloom Law Group website has the following message on their homepage:
“Welcome to Bloom Law Group
ATTENTION ALL CLIENTS OF BLOOM LAW GROUP. WE UNDERSTAND MANY OF YOU HAVE BEEN TRYING TO REACH US IN REGARDS TO YOUR LEGAL MATTERS WITH NO SUCCESS. WE ARE NOTIFYING ALL OUR CLIENTS THAT WE ARE CURRENTLY UNDER A RECEIVERSHIP BY A LAW FIRM THAT IS CONDUCTING A COMPLIANCE AUDIT OF OUR BUSINESS MATTERS. IN THIS TIME PERIOD WE CAN NOT OPERATE THE LAW FIRM AND IT IS COMPLETELY NOT IN OUR CONTROL. PLEASE BE PATIENT IN THIS TIME AND WE WILL BE IN CONTACT WITH YOU ALL SHORTLY. WE TRULY APOLOGIZE AND WISH WE COULD DO SOMETHING ABOUT THIS SOONER. WE HOPE TO BE BACK AND HELPING ALL OUR CLIENTS RESOLVE THIER ISSUES AS SOON AS POSSIBLE. WE ARE DOING EVERYTHING IN OUR POWER TO GET THIS EXPEDITED FOR THE SAKE OF HELPING ALL OF YOU.
THANK YOU” – Source
The FTC describes the “common enterprise” of all these related companies in a different court document. “The corporate defendants, A1, Bloom Law, and Stream Lined, have operated as a common enterprise to defraud consumers with their student loan debt relief and mortgage relief schemes. Defendants have conducted the business practices through an interrelated network of companies that, as described above, are commonly owned or managed by Homan Ardalan. As described in more detail below, A1 and Bloom Law share a similar business method of using purported government affiliates controlled by Ardalan (Project Uplift Students, Home Shield Network, and Keep Your Home USA) to funnel consumers to A1 and Bloom Law, which also are owned or controlled by Ardalan. Ardalan uses the Stream Lined corporate name when registering websites and phone numbers for the other corporate defendants. The companies have commingled funds. Ardalan controls funds in each of the corporate defendants’ bank accounts, and bank records obtained through Commission CIDs show consistent, substantial payments from both A1 and Bloom Law Group accounts to Stream Lined’s corporate account. As detailed below, Ardalan appears to operate the Stream Lined account as his personal fund, which shows dissipation of over $230,000 for highend cars, nightclub expenses and luxury personal items like Cartier jewelry. He also made approximately $850,000 in payments for an American Express card in his name, and transferred over $280,000 to personal accounts.” – Source