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f ILELJ 

KATHERINE M. AIZPURU (pro hoc vice applicati.on pending) 

kaizpuru@ftc.gov . . . llllJ APR 24 AM /0:04 S_AMUEL JACOBSON (pro hoc vice apphcat1on pendmg) Cl ff-•~ . . . 

SJacobson@ftc.gov cU1ff' -;- ";·' ~,,,;_, COURT 

FEDERAL TRADE c oMM1ss1ON ·s\iil ~ZA Gr.uF. 

600 Pennsylvania Avenue, N.W. iY:__ 

Mai l Stop: CC- 10232 -------1 

Washington, D.C. 20580 

(202) 326-2870 

JOHN D. JACOBS, Cal. Bar No. I 34154 

Local Counsel 

jjacobs@ftc.gov 

FEDERAL TRADE COMMISSION 

10990 \.Vilshire Boulevard, Suite 400 

Los Angeles, CA 90024 

(3 I0) 824-4300 

(310) 824-4380 (fax) 

Attorneysfor Plaintiff 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

V. 

SL FINANCE LLC, a California limited 

liability company; 

MICHAEL CASTILLO, individually and 

as an officer of SL FINANCE LLC; and 

CHRISTIAN CASTILLO, individually 

and as an officer of SL FINANCE LLC; 

Defendants. 

~ -23-01 -fJOf1l18 , OWH 

Case No. · 'S IG) 

COMPLAINT FOR 

PERMANENT JN,JUNCTION, 

J.\ilONETARY RELIEF, AND 

OTHER RELIEF 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges: 

1. The FTC brings this action under Sections 13(b) and 19 of the Federal 

Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, the 

Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing 

Act”), 15 U.S.C. §§ 6101-6108, Section 1401(c) of the COVID-19 Consumer 

Protection Act of the 2021 Consolidated Appropriations Act, Pub. L. No. 116-260, 

134 Stat. 1182, Div. FF, Title XIV, § 1401(c), (Prohibiting Deceptive Acts or 

Practices in Connection With the Novel Coronavirus) (“COVID-19 Consumer 

Protection Act”), and Section 522(a) of the Gramm-Leach-Bliley Act (“GLB 

Act”), 15 U.S.C. § 6822(a), which authorize the FTC to seek, and the Court to 

order, temporary, preliminary, and permanent injunctive relief, monetary relief, 

and other relief, including an asset freeze, appointment of a receiver, and 

immediate access to Defendants’ business premises, for Defendants’ acts or 

practices in violation of (1) Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), (2) the 

FTC’s Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, (3) the COVID-19 

Consumer Protection Act, and (4) the GLB Act, 15 U.S.C. § 6821. Defendants’ 

violations are in connection with their deceptive marketing and sale of student loan 

debt relief services. 

SUMMARY OF CASE 

2. Defendants lure consumers, many of whom are low-income borrowers 

saddled with tens of thousands of dollars of student debt, into paying hundreds of 

dollars in exchange for false promises of loan forgiveness. 

3. Defendants falsely tell borrowers that Defendants are affiliated with 

the federal government (or, specifically, the Department of Education); are 

administering government programs, including a made-up COVID-19-related 

student debt relief initiative; and will purchase borrowers’ debt from federal loan 

servicers in order to secure debt relief on their behalf. Defendants then collect 

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hundreds of dollars in illegal up-front payments. 

4. But Defendants’ promises are false. Defendants do not seek or deliver 

loan forgiveness, loan repayment plans, or even a reduced loan balance. 

Consumers have paid significant sums to Defendants only to find that Defendants 

have not applied their payments to consumers’ loan balances, sought or obtained 

forgiveness of their loans, or taken over servicing their loans. When consumers 

realize they were duped and ask for a refund, Defendants often refuse to make 

them whole. 

5. Through this action, the FTC seeks to put an end to Defendants’ 

scheme and secure redress for the consumers whom Defendants have harmed. 

JURISDICTION AND VENUE 

6. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 

1331, 1337(a), and 1345. 

7. Venue is proper in this District under 28 U.S.C. § 1391(b)(1), (b)(2), 

(c)(1), (c)(2), and 15 U.S.C. § 53(b). 

PLAINTIFF 

8. The FTC is an independent agency of the United States Government 

created by the FTC Act, which authorizes the FTC to commence this district court 

civil action by its own attorneys. 15 U.S.C. §§ 41–58. The FTC enforces Section 

5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or 

practices in or affecting commerce. The FTC also enforces the Telemarketing Act, 

15 U.S.C. §§ 6101-6108. Pursuant to the Telemarketing Act, the FTC promulgated 

and enforces the TSR, 16 C.F.R. Part 310, which prohibits deceptive and abusive 

telemarketing acts or practices in or affecting commerce. The FTC also enforces 

the COVID-19 Consumer Protection Act, which prohibits deceptive acts or 

practices under the FTC Act associated with a government benefit related to 

COVID-19, COVID-19 Consumer Protection Act § 1401(b)(2). The FTC also 

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enforces the GLB Act, 15 U.S.C. §§ 6821-27, which prohibits any person from 

obtaining or attempting to obtain customer information of a financial institution 

relating to another person by making a false, fictitious, or fraudulent statement or 

representation to a customer of a financial institution. 

DEFENDANTS 

9. Defendant SL Finance LLC (“SL Finance”) is a California limited 

liability company that has a principal office listed at 12900B Garden Grove 

Boulevard, Suite 170, Garden Grove, CA 92843. SL Finance transacts or has 

transacted business in this District and throughout the United States. At all times 

relevant to the Complaint, acting alone or in concert with others, SL Finance has 

advertised, marketed, offered to provide, sold, or provided student loan debt relief 

services to consumers throughout the United States. 

10. Defendant Michael Castillo is an owner and officer of SL Finance. 

He has been a signatory on the business bank accounts maintained by SL Finance, 

and served as a point of contact for SL Finance customer communications. At all 

times relevant to this Complaint, acting alone or in concert with others, he has 

formulated, directed, controlled, had the authority to control, or participated in the 

acts and practices set forth in this Complaint. Defendant Michael Castillo is a 

former employee of BCO Consulting Services Inc., also d/b/a Students Loan 

Services LLC, a student loan debt relief company named as a defendant in the 

concurrently filed Federal Trade Commission v. BCO Consulting Services, Inc. 

Defendant Michael Castillo resides in this District and, in connection with the 

matters alleged herein, transacts or has transacted business in this District and 

throughout the United States. 

11. Defendant Christian Castillo is an owner and officer of SL Finance. 

He has been a signatory on the business bank accounts maintained by SL Finance 

and served as the customer contact for SL Finance’s telecommunications 

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agreements. At all times relevant to this Complaint, acting alone or in concert with 

others, he has formulated, directed, controlled, had the authority to control, or 

participated in the acts and practices set forth in this Complaint. Defendant 

Christian Castillo is a former employee of BCO Consulting Services Inc., also 

d/b/a Students Loan Services LLC, a student loan debt relief company named as a 

defendant in the concurrently filed Federal Trade Commission v. BCO Consulting 

Services, Inc. Defendant Christian Castillo resides in this District and, in 

connection with the matters alleged herein, transacts or has transacted business in 

this District and throughout the United States. 

COMMERCE 

12. At all times relevant to this Complaint, Defendants have maintained a 

substantial course of trade in or affecting commerce, as “commerce” is defined in 

Section 4 of the FTC Act, 15 U.S.C. § 44. 

BACKGROUND ON STUDENT LOAN 

FORGIVENESS AND REPAYMENT PROGRAMS 

13. Student loan debt is the second largest class of consumer debt, with 

over 45 million borrowers owing approximately $1.75 trillion. Student loan debt is 

also one of the most distressed classes of debt: approximately $110.5 billion of 

student loans are in default. 

14. The federal government administers several student loan forgiveness 

and discharge programs. These include income-driven repayment (“IDR”) 

programs, which allow eligible borrowers to limit their monthly payments based 

on a percentage of their discretionary monthly income and offer forgiveness after a 

borrower has made payments for 20 or 25 years; and public service loan 

forgiveness (“PSLF”), which provides loan forgiveness to borrowers who make 

payments for ten years while employed at qualifying government or nonprofit 

organizations. ED also administers other loan forgiveness programs for qualifying 

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borrowers, including those who can establish a permanent and total disability; 

borrowers whose school closed while they were enrolled; and borrowers whose 

school violated certain state or federal laws, among others. 

15. Consumers can apply for these and other programs through ED or 

their student loan servicers at no cost. These programs do not require the assistance 

of a third-party company or payment of application fees. 

16. In addition to federal loan repayment and forgiveness programs, the 

original coronavirus relief bill, the Coronavirus Aid, Relief, and Economic 

Security Act (“CARES Act”), signed into law on March 27, 2020, temporarily 

paused payments and involuntary collections on federally held student loans 

through September 30, 2020. President Trump extended the pause until December 

31, 2020, and President Biden has extended the pause into 2023. During the pause, 

payments are not due, collection activities (like wage garnishment and reduction of 

tax refunds) have been prohibited, and interest does not accrue on loan balances. 

17. Months during the pause count toward the 120 payments required by 

PSLF (if the borrower works for a qualifying employer during the suspension plan) 

and also toward payments required to receive forgiveness under IDR plans. 

18. In 2022, in addition to the above ongoing programs and COVID-19 

payment pause, President Biden and ED created a one-time debt relief program for 

borrowers of federal student loans. 

19. Several individuals and organizations filed legal challenges to the 

one-time debt relief program. As of this filing, the program is subject to injunctions 

blocking its implementation. 

20. The student loan repayment pause is extended until ED is permitted to 

implement the program or until the litigation is resolved. If the program has not 

been implemented and the litigation is not resolved by June 30, 2023, then 

payments will resume 60 days after that date. 

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DEFENDANTS’ STUDENT LOAN DEBT RELIEF SCAM 

21. Defendants own and operate a student loan debt relief scam that preys 

on consumers burdened with student loan debt by making false promises of loan 

forgiveness. Since at least May 14, 2019, Defendants have collected hundreds of 

dollars per consumer from thousands of consumers—for a total of approximately 

$6 million. 

22. Defendants’ scheme relies heavily on false and misleading 

representations made by Defendants’ representatives to consumers, often made 

during an initial call between a telemarketer and a consumer. 

23. In many instances, Defendants use telemarketers to make outbound 

telemarketing calls to consumers to offer their services and convince student loan 

borrowers to sign up with the company. In some instances, Defendants send to 

consumers unsolicited emails containing a number that consumers may call to 

obtain more information. When consumers call the number, they speak with 

Defendants’ telemarketers. 

24. Defendants’ telemarketers entice consumers to stay on the line with 

them by promising to alleviate the burdens of their student loans. Consumers have 

reported that Defendants’ telemarketers sound official, and lead them to believe 

Defendants will deliver on their promises. 

Defendants’ Misrepresentations to Consumers 

25. To persuade consumers into signing up and paying for Defendants’ 

purported student loan debt relief services, Defendants, often acting through their 

telemarketers, make at least five types of claims: 

a) Consumers who pay for Defendants’ program will be enrolled 

in a loan repayment program and have their loan balances forgiven in 

whole or in part; 

b) Most or all of consumers’ monthly payments to Defendants will 

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be applied to their loan balances; 

c) Defendants are contracted by, or otherwise affiliated with, ED; 

d) Defendants will assume responsibility for the servicing of 

consumers’ student loans; and 

e) Defendants’ program is part of the CARES Act or some other 

COVID-19 relief program created by the federal government. 

26. First, Defendants have represented to numerous consumers that if 

consumers sign up for Defendants’ debt relief program, Defendants will enroll 

them in a loan repayment program and secure forgiveness of their student loans. 

27. Defendants frequently tell consumers that the repayment program will 

include a schedule of three-to-six monthly payments of approximately $200, 

sometimes followed by monthly payments of approximately $39 for a period of 

months or years. All of these payments are to be made to Defendants. 

28. Defendants in many instances tell consumers that their loans will be 

forgiven either directly upon payment of the initial installments of approximately 

$200, or after several months or years of making payments of approximately $39. 

Often, the quoted repayment program is substantially shorter than the ten- or 

twenty-year programs offered by the federal government—sometimes only a few 

months. 

29. These representations are false. In many instances, Defendants do not 

even apply for—much less obtain—legitimate federal repayment plans, such as 

income-driven repayment plans, or student loan forgiveness on behalf of the 

consumers who pay for Defendants’ services. 

30. Numerous consumers have reported that Defendants did not apply for 

income-driven repayment programs, public service loan forgiveness, or other 

forms of loan forgiveness and repayment plans on their behalf, even though they 

provided information about their income and employment and made payments to 

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Defendants. 

31. Second, Defendants often tell consumers the payments will be 

applied to reduce their loan balance. 

32. In fact, Defendants in numerous instances take the money for 

themselves and do not make payments to consumers’ student loans on their behalf. 

Many consumers have reported that Defendants did not apply any of their 

payments to their student loans and that their balances did not decrease after 

making payments to Defendants. 

33. Because borrowers of federal student loans have not been required to 

make payments on their student loans since March 2020, federal student loan 

servicers are not expecting to receive monthly payments and are not likely to 

contact consumers if payments are not received. Defendants have taken advantage 

of the lull in borrower-servicer communications to deceive borrowers into paying 

them instead of making payments on their student loans or saving that money for 

other purposes. 

34. Third, Defendants frequently tell consumers that they are “affiliated” 

with the federal government (or, specifically, ED), that they are “contracted” by 

the government, or even that they are the federal government. 

35. But Defendants are not affiliated with ED and do not hold contracts 

with ED. 

36. Fourth, Defendants have represented to numerous consumers that 

they will be purchasing, taking over, or handling servicing of consumers’ loans. 

Defendants have also told consumers that the up-front payments reflect the fee to 

“buy” consumers’ loans from their federal servicer. 

37. Defendants are not federal loan servicers and despite their 

representations to consumers, have not taken over or purchased consumers’ student 

loans. 

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38. Defendants have instructed consumers to ignore their current servicers 

while participating in SL Finance’s program and have characterized servicers as “a 

scam” that cannot or will not help borrowers seek favorable repayment plans and 

loan forgiveness. 

39. Fifth, Defendants in many instances falsely represent that the program 

they are marketing is related to a COVID-19 relief program such as the CARES 

Act. 

40. Defendants have sent emails to consumers falsely stating that “It looks 

like your student loan may be eligible for the recent stimulus forgiveness and relief 

legislation (Cares Act), however your application does need to be completed by 

[date], as that is when the Cares act [sic] is set to end.” 

41. Defendants’ telemarketers have told consumers, falsely, that 

Defendants’ program is a part of the CARES Act or other COVID-19 relief created 

by the government. 

42. Defendants’ telemarketers have also told consumers, falsely, that SL 

Finance works with ED to help students prepare for the end of the COVID-19 

repayment pause. 

43. In fact, the purported services that Defendants offer are not a 

government program created by the CARES Act or other government relief 

associated with the COVID-19 pandemic. 

Defendants’ Use of False, Fictitious, and Fraudulent Statements to Obtain 

Consumers’ Customer Information of a Financial Institution 

44. Defendants use the statements set forth in Paragraph 25 to deceive 

consumers into signing up for Defendants’ services and handing over their 

sensitive and personal financial information. 

45. Defendants have used the statements listed in Paragraph 25 to cause 

consumers to provide Defendants with their bank account numbers, debit card 

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numbers, and credit card numbers. 

Defendants’ Collection of Illegal Advance Fees 

46. Once in possession of consumers’ private and sensitive financial 

information, Defendants typically collect approximately five “initial” monthly 

payments of approximately $200, sometimes followed by monthly payments of 

approximately $39. 

47. Defendants have collected or attempted to collect hundreds of dollars 

for their “services” per consumer. Defendants mislead consumers into believing 

the majority of these payments are going towards paying off their student loan debt 

or otherwise securing loan forgiveness. 

48. In fact, Defendants are in numerous instances simply taking the 

money without delivering promised services. Many consumers have reported that 

Defendants have not sought or obtained repayment plans or student loan 

forgiveness for consumers who pay for Defendants’ services. Thus, in many 

instances, Defendants continued to receive fees from consumers despite never 

renegotiating, settling, reducing, or otherwise altering the terms of the consumers’ 

debt. 

49. During the federal COVID-19 student loan repayment pause, 

consumers have not been required to make payments on their federal loans at all. 

Consumers have paid more to Defendants during the pause than they would have 

been required to pay toward their student loan balances. 

50. When consumers have contacted Defendants to cancel their 

enrollment in Defendants’ program, Defendants threaten consumers with default or 

other adverse consequences. 

51. In many instances, Defendants have refused or ignored requests by 

consumers for refunds. 

52. Not only have Defendants refused or ignore refund requests, but many 

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consumers have reported that after they advised Defendants they did not want to 

participate in Defendants’ program, Defendants continued to charge or attempt to 

charge them anyway. 

53. When consumers change their bank account or debit card information 

or take other steps to block payments to Defendants, Defendants in many instances 

send threatening emails warning that consumers who do not pay Defendants could 

“risk falling into DEFAULT, and out of compliance with your approved program 

directly with the Department of Education.” 

54. In fact, Defendants often have not enrolled consumers in any program 

“directly with the Department of Education”; consumers are not at risk of falling 

“into DEFAULT” on their student loans because student loan payments are not due 

during the federal COVID-19 repayment pause; and even if payments were due, 

since Defendants do not, in many instances, apply payments to consumers’ loan 

balances, paying Defendants would not avoid missed payments. 

Defendants’ Violations of the National Do Not Call Registry 

55. Since November 26, 2022, Defendants initiated or caused the 

initiation of over 1.5 million outbound telephone calls to consumers. 

56. Defendants have made over one hundred thousand calls to telephone 

numbers on the National Do Not Call Registry (“Registry”). 

57. Defendants have also called telephone numbers in various area codes 

without first paying the annual fee for access to the telephone numbers within such 

area codes that are included in the Registry. 

Ongoing Conduct 

58. Based on the facts and violations of law alleged in this Complaint, the 

FTC has reason to believe that Defendants are violating or are about to violate laws 

enforced by the Commission. 

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VIOLATIONS OF THE FTC ACT 

59. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or 

deceptive acts or practices in or affecting commerce.” 

60. Misrepresentations or deceptive omissions of material fact constitute 

deceptive acts or practices prohibited by Section 5(a) of the FTC Act. 

Count I 

Deceptive Representations 

61. In numerous instances in connection with the advertising, marketing, 

promotion, offering for sale, or sale of student loan debt relief services, Defendants 

represent, directly or indirectly, expressly or by implication, that: 

a) Consumers who pay for Defendants’ program will be enrolled 

in a loan repayment program and will have their loan balances 

forgiven in whole or in part; 

b) Most or all of consumers’ monthly payments to Defendants will 

be applied to their loan balances; 

c) Defendants are affiliated with or contracted by the federal 

government or, specifically, ED; 

d) Defendants will assume responsibility for the servicing of 

consumers’ student loans; and 

e) Defendants’ program is part of the CARES Act or some other 

COVID-19 relief program created by the federal government. 

62. In truth and in fact, in numerous instances in which Defendants have 

made the representations set forth in Paragraph 61, such representations were false 

or unsubstantiated at the time Defendants made them. 

63. Therefore, Defendants’ representations as set forth in Paragraph 61 

are false or misleading and constitute deceptive acts or practices in violation of 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

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THE TELEMARKETING SALES RULE 

64. In 1994, Congress directed the FTC to prescribe rules prohibiting 

abusive and deceptive telemarketing acts or practices pursuant to the 

Telemarketing Act, 15 U.S.C. §§ 6101–6108. The FTC adopted the original TSR 

in 1995, extensively amended it in 2003, and amended certain sections thereafter. 

65. Defendants are “seller[s]” or “telemarketer[s]” engaged in 

“telemarketing” as defined by the TSR, 16 C.F.R. § 310.2(dd), (ff), and (gg). A 

“seller” means any person who, in connection with a telemarketing transaction, 

provides, offers to provide, or arranges for others to provide goods or services to a 

customer in exchange for consideration. 16 C.F.R. § 310.2(dd). A “telemarketer” 

means any person who, in connection with telemarketing, initiates or receives 

telephone calls to or from a customer or donor. 16 C.F.R. § 310.2(ff). 

“Telemarketing” means a plan, program, or campaign which is conducted to 

induce the purchase of goods or services or a charitable contribution, by use of one 

or more telephones and which involves more than one interstate telephone call. 16 

C.F.R. § 310.2(gg). 

66. Defendants are sellers or telemarketers of “debt relief services” as 

defined by the TSR, 16 C.F.R. § 310.2(o). Under the TSR, a “debt relief service” 

means any program or service represented, directly or by implication, to 

renegotiate, settle, or in any way alter the terms of payment or other terms of the 

debt between a person and one or more unsecured creditors, including, but not 

limited to, a reduction in the balance, interest rate, or fees owed by a person to an 

unsecured creditor or debt collector. 16 C.F.R. § 310.2(o). 

67. The TSR prohibits sellers and telemarketers from requesting or 

receiving payment of any fees or consideration for any debt relief service unless 

and until: 

a) The seller or telemarketer has renegotiated, settled, reduced, or 

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otherwise altered the terms of at least one debt pursuant to a 

settlement agreement, debt management plan, or other such valid 

contractual agreement executed by the customer; and 

b) The customer has made at least one payment pursuant to that 

settlement agreement, debt management plan, or other valid 

contractual agreement between the customer and creditor; and 

c) To the extent that debts enrolled in a service are renegotiated, 

settled, reduced, or otherwise altered individually, the fee or 

consideration either: 

(1) Bears the same proportional relationship to the total fee for 

renegotiating, settling, reducing, or altering the terms of the 

entire debt balance as the individual debt amount bears to the 

entire debt amount. The individual debt amount and entire debt 

amount are those owed at the time the debt was enrolled in the 

service; or 

(2) Is a percentage of the amount saved as a result of the 

renegotiation, settlement, reduction, or alteration. The 

percentage charged cannot change from one individual debt to 

another. The amount saved is the difference between the 

amount owed at the time the debt was enrolled in the service 

and the amount actually paid to satisfy the debt. 16 C.F.R. § 

310.4(a)(5)(i). 

68. The TSR prohibits sellers and telemarketers from misrepresenting 

directly or by implication any material aspect of any debt relief service, including, 

but not limited to, the amount of money or the percentage of the debt amount that a 

customer may save by using the service. 16 C.F.R. § 310.3(a)(2)(x). 

69. The TSR also establishes a “do not call” registry (the “National Do 

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Not Call Registry” or “Registry”), maintained by the FTC, of consumers who do 

not wish to receive certain types of telemarketing calls. Consumers can register 

their telephone numbers on the Registry without charge either through a toll-free 

telephone call or online at www.donotcall.gov. 

70. Consumers who receive telemarketing calls to their registered 

numbers can complain of Registry violations through a toll-free telephone call or 

online at www.donotcall.gov, or otherwise contacting law enforcement authorities. 

71. The FTC allows sellers, telemarketers, and other permitted 

organizations to access the Registry online, pay any required fees, and download 

numbers not to call. 

72. The TSR prohibits sellers and telemarketers from calling any 

telephone number within a given area code unless the seller on whose behalf the 

call is made has paid the annual fee for access to the telephone numbers within that 

area code that are included in the Registry. 16 C.F.R. § 310.8. 

73. The TSR prohibits sellers and telemarketers from initiating an 

outbound telephone call to telephone numbers on the registry. 16 C.F.R. § 

310.4(b)(1)(iii)(B). 

74. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. 

§ 6102(c), and Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation 

of the TSR constitutes an unfair or deceptive act or practice in or affecting 

commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

VIOLATIONS OF THE TELEMARKETING SALES RULE 

Count II 

Advance Fee for Debt Relief Services 

75. In numerous instances, Defendants have, in connection with the 

telemarketing of student loan debt relief services, requested or received payment of 

a fee or consideration for debt relief services before: 

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a) Defendants have renegotiated, settled, reduced, or otherwise 

altered the terms of at least one debt pursuant to a settlement 

agreement, debt management plan, or other such valid contractual 

agreement executed by the customer; and 

b) The customer has made at least one payment pursuant to that 

settlement agreement, debt management plan, or other valid 

contractual agreement between the customer and the creditor. 

76. Therefore, Defendants’ acts or practices as set forth in Paragraph 75 

violate the TSR, 16 C.F.R. § 310.4(a)(5)(i). 

Count III 

Material Debt Relief Misrepresentation 

77. In numerous instances, Defendants have, in connection with the 

telemarketing of student loan debt relief services, misrepresented, directly or 

indirectly, expressly or by implication, material aspects of their debt relief services, 

including, but not limited to, that: 

a) Consumers who pay for Defendants’ program will be enrolled 

in a loan repayment program and will have their loan balances 

forgiven in whole or in part; 

b) Most or all of consumers’ monthly payments to Defendants will 

be applied to their loan balances; 

c) Defendants are affiliated with or contracted by the federal 

government or, specifically, ED; 

d) Defendants will assume responsibility for the servicing of 

consumers’ student loans; and 

e) Defendants’ program is part of the CARES Act or some other 

COVID-19 relief program created by the federal government. 

78. Therefore, Defendants’ acts or practices as set forth in Paragraph 77 

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violate the TSR, 16 C.F.R. § 310.3(a)(2)(x). 

Count IV 

Violating the National Do Not Call Registry 

79. In numerous instances, Defendants have, in connection with the 

telemarketing of student loan debt relief services, engaged, or caused a 

telemarketer to engage, in initiating an outbound telephone call to a person’s 

telephone number on the National Do Not Call Registry in violation of the TSR, 16 

C.F.R. § 310.4(b)(1)(iii)(B). 

Count V 

Failing to Pay National Registry Fees 

80. In numerous instances, Defendants have, in connection with the 

telemarketing of student loan debt relief services, initiated, or caused others to 

initiate, an outbound telephone call to a telephone number within a given area code 

when Defendants had not, either directly or through another person, paid the 

required annual fee for access to telephone numbers within that area code that are 

included in the National Do Not Call Registry, in violation of the TSR, 16 C.F.R. § 

310.8. 

THE COVID-19 CONSUMER PROTECTION ACT 

81. The COVID-19 Consumer Protection Act makes it unlawful under 

Section 5 of the FTC Act for any person, partnership, or corporation to engage in a 

deceptive act or practice in or affecting commerce associated with the treatment, 

cure, prevention, mitigation, or diagnosis of COVID-19 or a government benefit 

related to COVID-19. COVID-19 Consumer Protection Act § 1401(b)(2). The Act 

provides that such a violation shall be treated as a violation of a rule defining an 

unfair or deceptive act or practice prescribed under Section 18(a)(1)(A) of the FTC 

Act, 15 U.S.C. § 57a(a)(1)(A). COVID-19 Consumer Protection Act § 1401(c)(1). 

VIOLATIONS OF THE COVID-19 CONSUMER PROTECTION ACT 

Count VI 

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Misrepresentations Associated with 

a Government Benefit Related to COVID-19 

82. In numerous instances in connection with the advertising, marketing, 

promotion, offering for sale, or sale of student loan debt relief services, Defendants 

have falsely represented to consumers that their debt relief services are part of the 

CARES Act or some other COVID-19 relief program created by the federal 

government. 

83. In fact, the services that Defendants offer are not part of the CARES 

Act or any COVID-19 relief program created by the federal government. 

84. Therefore, Defendants’ representations set forth in Paragraph 82 are 

false and misleading, and therefore constitute a deceptive act or practice associated 

with a government benefit related to COVID-19. 

THE GRAMM-LEACH-BLILEY ACT 

85. Section 521 of the GLB Act, 15 U.S.C. § 6821, became effective on 

November 12, 1999, and remains in full force and effect. Section 521(a)(2) of the 

GLB Act, 15 U.S.C. § 6821(a)(2), prohibits any person from “obtain[ing] or 

attempt[ing] to obtain . . . customer information of a financial institution relating to 

another person . . . by making a false, fictitious, or fraudulent statement or 

representation to a customer of a financial institution.” 

86. The GLB Act defines “customer” to mean “with respect to a financial 

institution, any person (or authorized representative of a person) to whom the 

financial institution provides a product or service, including that of acting as a 

fiduciary.” 15 U.S.C. § 6827(1). The GLB Act defines “customer information of a 

financial institution” as “any information maintained by or for a financial 

institution which is derived from the relationship between the financial institution 

and a customer of a financial institution and is identified with the customer.” 15 

U.S.C. § 6827(2). 

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87. Section 522(a) of the GLB Act, 15 U.S.C. § 6822(a), empowers the 

FTC to enforce Section 521 of the GLB Act “in the same manner and with the 

same power and authority as the [FTC] has under the Fair Debt Collection 

Practices Act [FDCPA] . . . to enforce compliance with such Act.” 

88. Section 814(a) of the FDCPA, in turn, makes a violation of the 

FDCPA an unfair or deceptive act or practice in violation of the FTC Act. 15 

U.S.C. § 1692l(a). Section 814(a) of the FDCPA further provides that all of the 

functions and powers of the FTC under the FTC Act are available to the FTC to 

enforce compliance by any person with the FDCPA, including the power to 

enforce provisions of the FDCPA in the same manner as if the violation had been a 

violation of an FTC trade regulation rule. 

89. Thus, pursuant to Section 522(a) of the GLB Act, the FTC may 

enforce Section 521 of the GLB Act in the same manner as if a violation of the 

GLB Act were a violation of an FTC trade regulation rule. 

90. Section 19 of the FTC Act, 15 U.S.C. § 57b, authorizes this Court to 

grant such relief as the Court finds necessary to redress injury to consumers 

resulting from violations of FTC trade regulation rules. Accordingly, Section 19 of 

the FTC Act, 15 U.S.C. § 57b, also authorizes this Court to grant such relief as the 

Court finds necessary to redress injury to consumers resulting from violations of 

the GLB Act. This relief may include, and is not limited to, recission or 

reformation of contracts, and the refund of money or return of property. 

Count VII 

Use of False, Fictitious, or Fraudulent Statements to Obtain or Attempt to 

Obtain Customers’ Customer Information of a Financial Institution 

91. In numerous instances in connection with the advertising, marketing, 

promotion, offering for sale, or sale of student loan debt relief services, Defendants 

have made false, fictitious, or fraudulent statements or representations to customers 

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of financial institutions to obtain or attempt to obtain those customers’ customer 

information of a financial institution. The customer information of a financial 

institution that Defendants obtain or attempt to obtain includes bank account 

numbers, debit card numbers, and credit card numbers. 

92. Defendants obtain or attempt to obtain the the customer information 

of a financial institution by representing to customers of financial institutions, 

directly or indirectly, expressly or by implication, that consumers who pay for 

Defendants’ program will be enrolled in a loan repayment program and have their 

loan balances forgiven in whole or in part; most or all of their payments will be 

applied to their loan balances; Defendants are affiliated with or contracted by the 

federal government or, specifically, ED; Defendants will assume responsibility for 

the servicing of consumers’ student loans; and Defendants’ program is part of the 

CARES Act or some other COVID-19 relief program created by the federal 

government. 

93. Defendants’ representations set forth in Paragraph 92 above are false, 

fictitious, or fraudulent within the meaning of Section 521 of the GLB Act. 

94. Therefore, Defendants’ acts and practices set forth in Paragraphs 91 to 

93 above violate Section 521 of the GLB Act, 15 U.S.C. § 6821. 

CONSUMER INJURY 

95. Consumers are suffering, have suffered, and will continue to suffer 

substantial injury as a result of Defendants’ violations of the FTC Act, the COVID19 Consumer Protection Act, the TSR, and the GLB Act. Absent injunctive relief 

by this Court, Defendants are likely to continue to injure consumers and harm the 

public interest. 

PRAYER FOR RELIEF 

Wherefore, Plaintiff requests that the Court: 

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A. Enter a permanent injunction to prevent future violations of the FTC 

Act, the COVID-19 Consumer Protection Act, the TSR, and the GLB Act; 

B. Grant preliminary injunctive and ancillary relief as may be necessary 

to avert the likelihood of consumer injury during the pendency of this action and to 

preserve the possibility of effective final relief, including temporary and 

preliminary injunctions, an order freezing assets, immediate access to Defendants’ 

premises, and appointment of a receiver; 

C. Award monetary and other relief within the Court’s power to grant, 

including the rescission or reformation of contracts, the refund of money, public 

notification, or other relief necessary to redress injury to consumers; and 

D. Award any additional relief as the Court determines to be just and 

proper. 

Respectfully submitted, 

Dated: ____________________ /s/ Katherine M. Aizpuru____ 

KATHERINE M. AIZPURU 

(pro hac vice application pending) 

kaizpuru@ftc.gov 

202-876-5673 

SAMUEL JACOBSON 

(pro hac vice application pending) 

sjacobson@ftc.gov 

202-876-5590 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Avenue, N.W. 

Mail Stop: CC-6316 

Washington, D.C. 20580 

JOHN D. JACOBS, Cal. Bar No. 134154 

Local Counsel 

jjacobs@ftc.gov 

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FEDERAL TRADE COMMISSION 

10990 Wilshire Boulevard, Suite 400 

Los Angeles, CA 90024 

(310) 824-4300 

(310) 824-4380 (fax) 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

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