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The Federal Trade Commission charged the operators of a phony student loan debt relief and credit repair scheme with bilking millions of dollars from consumers by falsely promising to reduce or eliminate their student loan debt and offering them non-existent credit repair services.

At the FTC’s request, a federal court has temporarily halted the operation. The agency seeks to permanently stop the alleged illegal practices and obtain refunds for affected consumers.

“Consumers who paid Strategic Student Solutions for help with their student loans watched their situations go from bad to worse,” said Tom Pahl, Acting Director of the FTC’s Bureau of Consumer Protection. “The bottom line: never pay an up-front fee to a company promising to deliver debt relief.”

According to the FTC’s complaint, the operators of Strategic Student Solutions (SSS) and related companies lured student loan borrowers with promises such as “Payments as low as $0 Monthly” or “Save 60 percent or MORE on your monthly payment.”

According to the FTC’s complaint, SSS operators told the student loan borrowers they would be enrolled in a loan forgiveness or payment reduction program, and that their monthly payments would be applied to their loans. However, in many cases, consumers discovered that the defendants failed to enroll them in any loan forgiveness or payment reduction programs, and found out that none of their monthly payments were applied to their student loan debt.

In its complaint, the FTC also alleges that SSS operators falsely represented that they would provide credit repair services and improve consumers’ credit scores. In exchange for the promised debt relief and credit repair services, defendants charged illegal upfront fees of up to $1200 and monthly payments typically of $49.99.

The individual defendant, Dave Green, owner of SSS and the related entities, used corporate funds to pay for personal expenses such as jewelry, casino tabs, mortgage payments, luxury vehicles, clothing, and construction of a pool.

The defendants named in the complaint, Green and his companies—Strategic Student Solutions LLC, Strategic Credit Solutions LLC, Strategic Debt Solutions LLC, Strategic Doc Prep Solutions LLC, Student Relief Center LLC, and Credit Relief Center LLC—are charged with violating the Federal Trade Commission Act, the Telemarketing Sales Rule, and the Credit Repair Organizations Act.

The FTC appreciates the assistance provided by the Ohio Office of the Attorney General, the Florida Office of the Attorney General, the Florida Department of Agriculture and Consumer Services, and the Washington Office of the Attorney General in bringing this case. The Commission vote authorizing the staff to file the complaint was 2-0. The complaint was filed in the U.S. District Court for the Southern District of Florida.

To help make consumers aware of fraudulent debt relief services, the FTC offers advice about student loan debt relief, in English and Spanish. The FTC also offers a list of every company and person courts have banned from selling debt relief services as a result of FTC actions.

Consumers seeking to reduce their student loans should always contact the Department of Education for official guidance.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court..

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.