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The Federal Trade Commission is sending more than $5.4 million to nearly 40,000 people who lost money to a student loan debt relief scam. The defendants behind the scam were required to turn over money under a 2018 settlement with the FTC.

The defendants’ Los Angeles-based companies used the following names: Alliance Document Preparation, LLC; EZ Doc Preps; Grads Aid; First Document Aid; SBS Capital Group, LLC; Grads United Discharge; SBB Holdings, LLC; Allied Doc Prep; Post Grad Services; United Legal Center, LLC; Post Grad Aid; Alumni Aid Assistance; United Legal Discharge; United Legal Center, Inc.; Grads Doc Prep, LLC; Academic Aid Center; Academic Protection; Academy Doc Prep; and Academic Discharge.

The FTC alleged that the defendants’ companies bilked millions from people trying to lower or eliminate their student loan debt. The defendants marketed on social media platforms, including Facebook. According to the FTC’s complaint, they misrepresented that they were affiliated with the U.S. Department of Education or the loan servicers, and falsely claimed that consumers who paid an upfront fee of up to $1,000 were qualified or approved for permanently reduced monthly payments or loan forgiveness. In fact, the complaint alleged, the defendants had no affiliation with the U.S. Department of Education and operated a service that provided no relief.

As part of the settlement, the FTC is sending 39,734 checks, averaging $136.48, to people who lost money. The checks will expire after 60 days, as indicated on the check. The FTC urges people to cash them before they expire. The FTC never requires consumers to pay money or provide account information to cash a refund check.

Consumers who have questions about the refunds should contact the refund administrator, Analytics, at 1-877-270-9672. To learn more about the FTC’s refund programs, visit www.ftc.gov/refunds.

Consumers who wish to avoid falling victim to such frauds can visit ftc.gov/StudentLoans to learn more. Consumers also can apply for loan deferments, forbearance, repayment, and forgiveness or discharge programs directly through the U.S. Department of Education, or their loan servicers, at no cost; these programs do not require the assistance of a third-party company or payment of application fees. For federal student loan repayment options, visit StudentAid.gov/repay. For private loans, contact the loan servicer directly.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.