The Federal Trade Commission released a letter they recently sent to Frank Financial Aid to back off their efforts to promote a coronavirus relief program targeting student loan holders.
The FTC specifically warned TAPD, Inc, doing business as Frank Financial Aid, to be warned about the following issues.
“FTC staff has reviewed advertising and marketing by Frank, including the website www.withfrank.org, as recently as November 9, 2020. This website makes some potentially misleading claims including that:
- Consumers may “[a]pply in 2 minutes for your student emergency grant” through Frank’s website and that “Frank emails you everything you need to send to your school,” when in fact, Frank creates letters for consumers to submit that are not tailored to the application process and documentation requirements of each school;
- Students and/or their parents must have experienced one or more of four identified criteria (for example, a firing or furlough) since March 1, 2020 to be eligible for emergency relief, when in fact, each school determines its own grant eligibility criteria; and
- Consumers who receive a cash advance from Frank can “[p]ay it back when your financial aid comes in” (also stated as “[w]hen your aid comes in, pay us back”), when in fact, fine print reveals that consumers are required to pay back Frank’s cash advance “61 days after the date of disbursement.”
It sounds like Frank is offering some document preparation service here.
The FTC says, “The letter warns Frank to take prompt action to ensure all deceptive or unlawful claims are removed or corrected, and any other required disclosures are provided. The letter also instructs the company to notify the FTC by November 17 about the specific actions it has taken to address the agency’s concerns.” – Source
I have no idea what the intentions were of Frank Financial Aid. Still, it seems plausible that some consumers could wind up with the wrong impression when the FTC says the “website advertises that consumers can obtain a cash advance of up to $5,000 on their student loans, with “No interest, no fees – ever” (also described on the website as 0% APR and 0% interest), despite charging a fee of $19.90 a month. As noted above, to the extent these claims are not truthful, are misleading, or are not substantiated, they would violate the FTC Act.”
An archived copy of the Frank Financial Aid website did promote the service below.
It appears from their archived site they were selling a cash advance against student aid or tuition cash. Students would have to pay $19.90 a month with a one-year commitment.
The cash advance against student aid is a new approach I had not seen before, but it is one more thing smart consumers need to be on the watch for. Being a cautious consumer is a full-time job.