Markets Wired

The ringleader of a California-based student loan debt relief scheme has agreed to settle the Federal Trade Commission’s charges that he bilked $11 million from consumers who were trying to reduce their student loan monthly payments or get loan forgiveness. Under the modified court order, recidivist scammer Tuan Duong admits he violated the 2016 order and is now banned from the telemarketing industry.

According to the FTC’s November 2018 complaint, Duong, among others, falsely promised to reduce students’ monthly loan payments or to eliminate or reduce their educational debts, but widely failed to deliver those services. The defendants also allegedly promoted a 96 percent success rate in reducing consumers’ student loan payments. In fact, the FTC alleged, the consumers who purchased these services often did not receive any debt relief and lost hundreds of dollars. The FTC also alleged that the defendants charged consumers illegal upfront fees of $300 or more for these purported debt relief services. At the request of the FTC, a federal court temporarily halted the scheme and froze its assets.

In 2015, the Commission sued Duong as part of Operation Mis-Modification, a joint federal-state enforcement initiative against six fraudulent mortgage relief schemes. In 2016, the court granted the Commission’s motion for summary judgment against Duong. Under the final order, the court banned Duong from advertising, marketing, or promoting debt relief services or misrepresenting any fact material to consumers relating to any product or service.

The proposed modified final order against Duong contains both injunctive and monetary relief. The order contains an $11,000,215.25 judgment as compensatory relief to the FTC and permanently bans Duong from the telemarketing industry.

The Commission vote authorizing the filing of a stipulated modified order for permanent injunction, monetary judgment, and compensatory contempt relief as to defendant Tuan Doung was 5-0. The U.S. District Court for the Central District of California issued the order on May 29, 2019.

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.