Student Debt Doctor (SDD) in Fort Lauderdale Florida is the latest target of the FTC enforcement operation. Gary White, Jr is also named in the court documents as the president, manager, and owner of SDD.
The complaint filed says, “Since approximately January 2014, Defendants have operated an unlawful student loan debt relief entem rise that has preyed on consumers’ anxiety in repaying their student loans. Defendants often have promised falsely to reduce or eliminate consumers’ monthly payments and principal balances by enrolling them in repayment or debt forgiveness programs. In many instances, consumers have discovered that Defendants have failed to enroll them in a program or have otherwise have failed to reduce or eliminate their payments or their debt. In some instances, consumers have ended up owing more on their student loans than when they first signed up for Defendants’ services.”
I’ve written about Student Debt Doctor in the past and I’ve been critical of their operation but I’ve also been impressed with the responses I’ve received from Gary White. Gary seemed like a professional person who clearly had something run off the rails.
Maybe this information from the suit filed by the FTC will help to better understand their allegations against Student Debt Doctor.
“Defendants have promised to enroll consumers in student-loan-repayment programs to reduce or eliminate their payments and principal balances. Defendants have made these claims in online advertising, e-mails, and on telemarketing calls. In some instances, consumers view Defendants’ website or online advertising and call Defendants’ telemarketers for more information. In other instances, Defendants’ telemarketers make outbound calls to consumers to offer SDD’S services or convince consumers to sign SDD’S standard contract.”
“Other portions of the studentdebtdoctor.org website also have included
the following statements or promises:
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- “our experts … can consult your personal situation towards loan forgiveness or substantially lower monthly payments”;
- “our clients may typically receive $0 a month payments with a complete loan forgiveness at the end of the programs. This is what is typical with most federal student loans”; and
- “[t]ypically . . . our clients are under a $0/month payment.”
These sorts of blanket states can be very problematic when attempting to roll out a scalable mass market solution.
This marketing line they allegedly used is alarming, “We can .. . solve your student loan problem. 100% guaranteed.”
And here is where one of the secrets of student loan assistance gets busted wide open. It’s been a silent fact the reason many student loan assistance companies get low payments is because they “fudge” the facts when completing the paperwork for income reduction qualification. It looks like the FTC finally caught onto this fact.
The complaint says, “Eligibility for these repayment programs generally depends on the consumer’s annual income and family size, as defined and established by federal laws and regulations. Defendants’ claims of eligibility often have been based on false definitions of “family size,” inflated family-size numbers, or inaccurate income claims that, if accurate, would have rendered these consumers ineligible under the applicable laws and regulations for the benefits SDD promised.”
The company and Gary White are alleged to have engaged in deceptive student loan debt relief representations, have violated the Telemarketing Sales Rule regarding advance fees, and made material debt relief misrepresentations.
The FTC has requested the court freeze the assets of the company and asked to have a receiver appointed to most likely wind the company down. The court agreed.
You can read the full FTC suit here against Student Debt Doctor.
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