CHICAGO (CBS) — Illinois Attorney General Lisa Madigan filed lawsuits on Monday against two companies she claims exploit people struggling to repay student loan debts.
Two separate suits have been filed against Chicago-based First American Tax Defense LLC and Broadsword Student Advantage LLC of Texas.
“Increasingly we see con artists that are targeting the millions of people across the country that are struggling to repay their student loans,” Madigan said.
“These scammers use tactics that are similar to what we saw when people were struggling to make their mortgage payments or were buried under a mountain of credit card debt.”
According to Public Interest Advocate Dev Gowda of Illinois PIRG, “Scammers who take advantage of student loan borrowers by making false promises to modify loans will be held accountable.”
Falling prey to scammers wreaks havoc on the lives of students, prospective students, their families and those who years later still struggle to repay their education loans.
Nurse Sharon Brown heard a popular radio ad by Broadsword Student Advantage and immediately responded to the chance to erase her student loan.
“Any opportunity to pay $400 less than I typically had to pay would’ve been fantastic,” Brown tells CBS 2’s Dorothy Tucker.
Brown was suspicious because, she says, they wanted $299 the first month and $199 the second month.
“It is illegal to receive an upfront payment for so-called debt-relief services,” Madigan says.
Alexis Mayfield just got her master’s in education. She’s aware of bogus offers but says it’s easy to fall prey.
Madigan says those needing help paying off student loans should contact the U.S. Department of Education.
CBS 2 was unable to find a working number for the Chicago company. The other one had no comment.
More than 40 million Americans currently owe over $1.2 trillion in student loan debt.