SCAM! Student Loan Debt Relief Company Stole from Thousands of Borrowers

Consumer Bureau taking action to shut down fraudulent operator

Andy Spears

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Photo by Mars Sector-6 on Unsplash

Student loans can be frustrating, and they can stick with you for a long time. In some cases, a borrower may attempt to find help in restructuring a loan or repayment terms to better fit their budget and lifestyle.

Enter student loan debt relief companies. In theory, these companies help borrowers find more manageable payment arrangements. In practice, there are some shady operators looking to make a quick buck from borrowers desperate for help.

The story of Frank Gebase, Jr. and his scam company is one involving not one, but two businesses shut down for fraud. Now, the students impacted may finally see justice (and get some money back).

A student loan debt relief company’s operator will be banned from the debt relief industry under an order requested by the Consumer Financial Protection Bureau (CFPB) in response to multiple acts of fraud.

The CFPB alleges that Frank Gebase, Jr. controlled a company that took the borrowers’ money after obtaining their names and account information from a previous student-loan debt-relief scammer that the CFPB shut down. The CFPB’s proposed settlement, if entered by the court, would ban Gebase from the debt-relief industry and order him to pay a penalty.

In a statement, the CFPB explained the nature of Gebase’s fraudulent activity that harmed student loan borrowers:

“Frank Gebase brazenly rebooted a student debt-relief scam the CFPB shut down over six years ago,” said CFPB Director Rohit Chopra. “When student loan servicers don’t provide clear and accurate information to borrowers, it sets the stage for scammers to swoop in.”

The CFPB alleges that rather than starting his own student loan debt relief company, Gebase acquired account information from a company known as Student Aid Institute — a company the CFPB had previously shut down.

The complaint notes that Gebase’s new company, known as Processingstudentloans, made unauthorized withdrawals from customer accounts in the amount of $39 a month, effectively stealing hundreds of thousands of dollars in fees during the course of his fraud.

If the court agrees with the CFPB’s request, Gebase will face the following penalties:

  • Pay a $175,000 fine: Gebase will pay the $175,000 penalty to the CFPB, and the CFPB will deposit it into the CFPB’s victims relief fund.
  • Stop participating in debt-relief and other activities: Gebase will be permanently banned from offering or providing debt-relief products or services, financial advisory services, and other related products and services, as described in the proposed stipulated final judgment and order.

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Originally published at https://original.newsbreak.com.

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .