Minnesota Attorney General Keith Ellison has joined the federal Consumer Protection Bureau and two other states in a lawsuit against three California companies that are allegedly running a fraudulent student loan forgiveness scheme.
The companies — the Consumer Advocacy Center, True Count Staffing Inc. and Prime Consulting LLC — did business under several different names. They are accused of charging consumers as much as $1,300 to consolidate student loans and enroll in payment plans that are free for federal borrowers.
The lawsuit says the companies cooperated to deceive customers into believing the fees would help them reduce their student loan debt. Instead, the companies kept the money paid by thousands of people, including about 1,000 Minnesotans, amounting to more than $71 million in illegal fees nationwide.
“The cost of student loans that too many people have to take out to do that is already too high. It boils my blood when fraudsters then come along and prey on them,” Ellison said in a statement announcing the lawsuit.
Ellison noted that his office began investigating the Consumer Advocacy Center, or CAC, in 2018. The company filed for bankruptcy earlier this year listing Minnesota as one of its creditors.
Minnesota, North Carolina, California and the federal Consumer Protection Bureau filed lawsuits against the three companies Oct. 21. The complaints also name three individuals: Albert Kim, Kaine Wen, and Tuong Nguyen.
The lawsuit alleges customers were charged illegal fees they thought would go towards student loans, falsely promised about student loan forgiveness and the companies lied to get the consumers lower monthly payments.
Ellison says anyone who was caught up in this scheme should call his office 651-296-3353 or 800-657-3787.
More information about federal student loan repayment programs can be found at www.studentaid.ed.gov/sa/repay-loans.