Today, the Consumer Financial Protection Bureau (CFPB) announced it is taking action to halt a nationwide student financial aid scam that allegedly ripped off tens of thousands of students and families across the country by illegally charging millions of dollars in fees for sham financial services. The Bureau filed a complaint in federal court against the company, which operates under the names of Student Financial Resource Center and College Financial Advisory, and the individual who owns and operates the scheme. The CFPB is seeking to halt illegal practices and obtain relief for harmed consumers.
“Student Financial Resource Center and College Financial Advisory scammed thousands of students by masquerading as government agencies and other trusted organizations,” said CFPB Director Richard Cordray. “Students and families were looking for information on how to pay for college, instead they were illegally charged millions of dollars for sham financial services. We will continue to take strong action against those who deceive consumers.”
Global Financial Support, Inc. is a California corporation owned by Armond Aria that operates under the names of College Financial Advisory and Student Financial Resource Center. According to the Bureau complaint, the deceptive scheme run by Aria and his businesses operates under the guise of a government or university-affiliated operation. The defendants allegedly send millions of deceptive letters to students and their families claiming to match them with targeted financial aid assistance programs for a fee. In reality, many consumers receive nothing in exchange for their fee and the scheme reaps millions of dollars in illegal fees.
The CFPB alleges in its complaint that the defendants are exploiting consumer uncertainty regarding how to use free federal financial aid resources. The Department of Education operates the Free Application for Federal Student Aid (FAFSA), a national program enabling students to apply for college loans and grants. The Department of Education does not charge any fees to apply for these programs, for which many student loan borrowers qualify.
The Bureau’s complaint alleges that Aria and his businesses violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition against deceptive acts and practices by misleading consumers about their services. The complaint also alleges the defendants violated federal privacy law for failing to provide a required privacy notice. Specifically, the CFPB alleges that they:
Through this lawsuit, the Bureau is seeking to stop the unlawful practices of Global Financial Support, Inc., Student Financial Resource Center, College Financial Advisory, and Armond Aria that are alleged in the complaint. The Bureau has also requested that the court order the defendants to provide restitution to harmed consumers and to pay penalties for their illegal conduct.
The Bureau filed the lawsuit in the U.S. Federal Court for the Southern District of California. The complaint is not a finding or ruling that the defendants have actually violated the law.
The CFPB’s complaint can be found at: http://files.consumerfinance.gov/f/201510_cfpb_complaint-for-permanent-injunction-and-other-relief-college-financial-advisory.pdf