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Student Loan Rip-offs Rile Lisa Madigan

Student Loan Rip-offs Rile Lisa Madigan

The Illinois attorney general is suing two companies for scamming people looking for student loan debt relief.

Attorney General Lisa Madigan says Chicago-based First American Tax Defense LLC and Broadsword Student Advantage of Frisco, Texas advertised across Illinois about programs to eliminate student loan debt. The scam starts, according to Madigan, by charging an upfront fee up to $1,200 for applying for government assistance.

“All of the services that they take your money for are completely free, available at no cost from the (U.S.) Department of Education,” Madigan said. “I mean, it’s a terrible scam.”

Madigan says that in itself violates a state law that forbids charging upfront fees for debt relief programs. The companies may also be charging monthly fees, according to Madigan, without delivering the promised results.

Madigan says similar scams have become more common as more people struggle to pay off student loans, so she expects more lawsuits to be filed.

 

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