The operators of a Los Angeles-based student loan and mortgage debt relief operation have agreed to settle Federal Trade Commission charges that they bilked millions of dollars out of consumers by falsely claiming to be affiliated with the federal government.
The agreed judgment amount against the Defendants was $9,131,712.
The defendants, A1 DocPrep Inc., Steamlined Marketing, and their owner, Homan Ardalan, falsely claimed to be from the Department of Education, and promised to reduce borrowers’ monthly payments or forgive their student loans, according to the FTC’s October 2017 complaint.
The FTC also alleged the defendants targeted distressed homeowners by making false promises that they would provide mortgage relief and prevent foreclosure. Defendants allegedly collected advance fees from consumers of up to $4,500, in violation of the Telemarketing Sales Rule and Mortgage Assistance Relief Services Rule.
Under the settlement order, the defendants are banned from debt relief and telemarketing activities and prohibited from making misrepresentations or unsubstantiated claims related to financial or othe products or services.
The settlement order also prohibits these defendants from profiting from customers’ personal information collected as part of the challenged practices, and failing to dispose of such information properly.
The order includes a judgment of more than $9 million, representing gross revenues of the defendants’ student loan and mortgage debt relief operation, minus refunds. Due to inability to pay, the order partially suspends the monetary judgment after the defendants turn over all of their assets, approximately $305,000.
The Commission settled with the other defendant, Bloom Law Group earlier this year.