FTC Cracks Down on Student Loan Debt Relief Schemes

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Some student loan borrowers having trouble repaying their loans are getting desperate, causing them to look for help in the wrong places. Federal regulators announced another crackdown this week on firms that charge illegal up-front fees, and ongoing monthly fees, selling debt relief services to these borrowers that are generally available for free. Three cases announced this week by the Federal Trade Commission add to similar cases already announced by other federal regulators, revealing the extent and persistence of the problem.

Complaints against some of these firms can be found online dating back to 2013.

In one case announced by the FTC this week, the operators of Florida firm Consumer Assistance Project reportedly charged an up-front fee of around $250, followed by monthly fees of up to $303 for as long as 36 months.

“The defendants pretend to evaluate these consumers for eligibility, and then tell them they qualify for government student loan forgiveness programs that will reduce their debt by at least 50% to 70%. In reality … consumers are not likely to meet the strict requirements of these loan forgiveness programs,” the FTC said in a news release.

The release also states that some of the social media praise the service was receiving were fake.

An operator at the company said the firm was “not interested” in offering a comment for this article.

In the second case, another Florida firm called Student Aid Center Inc. ran a now-defunct website named studentloanforgiveness.org that promised, “Get Your Student Loans Forgiven Now!” and “$17,500 in Up Front Forgiveness.” Callers were told they were approved for lower monthly payments, and typically charged $199 monthly, or more.  Attempts to contact the firm for comment went unreturned.

In a third case, the operators of Good EBusiness, Select Student Loan Help LLC, and Select Document Preparation Inc., which the FTC sued earlier this year, agreed to settle allegations. The firm is now permanently barred from the debt relief business. Attempts to contact Good EBusiness for comment went unreturned

“The FTC is not going to stand on the sidelines when it uncovers evidence of fraudsters targeting students,” Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said. “Consumers should be wary of any company that claims it can eliminate or greatly reduce debt, especially if they ask for money in advance.”

Back in March, when the Consumer Financial Protection Bureau announced its own student loan debt relief cases, officials from the U.S. Department of Education pleaded with consumers not to seek help from third parties.

“To all the Americans out there working hard to keep up with your student loan payments, please remember: you never have to pay for help,” U.S. Secretary of Education John B. King Jr. said earlier this year.

If you are working on paying off student loan debt and want to find out how it’s impacting your credit score, you can see your free credit report summary, updated each month, on Credit.com.

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8 Tips to Stop Annoying Robocalls

Automated calls are becoming more frequent and more infuriating. Weren’t they supposed to have been banned? Yes, but that hasn’t happened in practice.

According to the Better Business Bureau, the federal Telemarketing Sales Rule prohibits recorded sales messages unless you have given written permission for the caller to contact you, regardless of whether or not your number is on the Do Not Call registry.

Nonetheless, a growing number of consumers are receiving calls that offer fraudulent credit card services, questionable auto warranty plans, home security systems and grant procurement programs.

Here are some tips from the BBB and Money Talks News for stopping robocalls. They’re not foolproof, but they can help.

1. Keep Your Number to Yourself

You know how businesses ask for your number for just about any reason? If you don’t have to give it, don’t. “It is a tacit invitation for them to call that number or sell it to a third party,” the BBB said. You still have privacy rights.

2. Tell Companies You Use to Buzz Off

It’s not illegal for a business to make marketing calls to you if you have a relationship with them. So read the terms and conditions of your purchases and services carefully. Buried in those agreements might be a clause agreeing to these annoying calls.

If you find out too late that you agreed to their spam, you can still stop it by specific request. Call and keep a record of the date you made the request, and follow up with the Federal Trade Commission if the business keeps harassing you.

3. Hang Up Right Away

If you get a robocall, immediately hang up. “There is nothing to gain from attempting to reason with the people behind the calls,” the BBB said.

Contact your service provider to see if it has free blocking services but be warned: Your caller ID might show a phony number when the robocall comes in because the latest technology can fool your service.

4. Don’t Press Numbers

In the past, many people have recommended certain number combinations or the pound key to delete your information from a robocall registry. But does pressing the right numbers really take you off the list?

The BBB said no, you’re actually making it worse: “By pressing a number, you are confirming that someone is actually responding to the call, and you will likely receive more of them.”

5. Get on the Do Not Call Registry

Sign up for the national Do Not Call Registry. It’s free, your number is never taken off the list, and it will at least stop law-abiding solicitors. It’s for both cellphones and landlines.

6. File a complaint

If you’ve been on the Do Not Call Registry for a month or longer and still get calls, file a complaint with the FTC. This may seem like a waste of time, but it doesn’t take long, and sometimes enough complaints can get policy changed.

If the call comes from an identifiable business, you should also report it to the Better Business Bureau.

7. Use a Free Service to Block All Robocalls

Consider using a free tool like Nomorobo, which you can use to block robocalls. You tell it who your carrier is, provide an email address and from that point forward, an algorithm blocks robocalls.

Nomorobo works by letting your phone ring once. It then identifies the caller and if it’s a robocaller, it hangs up.

Note, however, that the company site warns, “Nomorobo is only available on certain VoIP providers and only in the United States.” It isn’t yet available for most major cellphone companies.

8. Block political calls

The 2016 election campaign is starting to heat up. Since politicians aren’t trying to sell you anything, their calls are excluded from the do-not-call rules. That means these folks can call your landline and don’t have to stop even if you ask.

The best solution may be to have a tool like Nomorobo block these robocalls. But that’s about your only defense.

This post originally appeared on MoneyTalks News.

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How to Spot a Bogus Diet Plan

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It’s the time of year when people look at their bank accounts — and their scales — and resolve to do a bit better next year.

There’s more than a coincidental connection between eating healthy and saving money. Researchers have found that, at least in some cases, the same part of the brain that promotes good choices also promotes good eating habits, i.e., “trade a cookie today for a healthier tomorrow.”

So it should come as little surprise that come-ons you’ll see for get-rich-quick schemes seem almost identical to pitches for weight loss programs. “Everyone will lose weight” sounds a lot like “You can’t lose with this investment;” “Lose 30 pounds in 30 days” sounds an awful lot like “15% returns or more.”

False diet claims got a lot of national attention last year when Dr. Mehmet Oz was hauled before Congress as it investigated “The Oz effect.” Products that Oz hawks on his show, many with dramatic and unproven claims, sell like hotcakes online. Oz was criticized for helping these products, but he was not accused of breaking any laws.

At the hearing, the FTC’s Mary Engle said that the agency had brought “82 law enforcement actions in the past 10 years challenging false or unsubstantiated claims about the efficacy of a wide variety of weight loss products and services.”

New Year, New Weight Loss Gotchas

By some measures, two-thirds of Americans are overweight. That’s a really big potential market. During the holiday season with all the feasts, parties and cookies, that market only gets bigger. January is the time for making self-improvement resolutions. If you are thinking about living a healthier life, that’s great. But first, resolve that you won’t fall for a diet scam.

The Federal Trade Commission sums up the medical literature on weight loss nicely on its website devoted to avoiding bogus diet plans. There’s only one healthy way to lose weight — eat less, exercise more, stick to it for a long time and don’t expect dramatic results.

“For most people, a reasonable goal is to lose about a pound a week,” the FTC says. “Getting to a healthy weight takes work. Take a pass on any product that promises miraculous results without the effort. The only thing you’ll lose is money.”

Here is the FTC’s list of most common weight loss claims, per its website:

  • Lose weight no matter how much you eat of your favorite foods! Beware of any product that claims that you can eat all the high-calorie food you want and still lose weight. Losing weight requires sensible food choices. Filling up on healthy vegetables and fruits can make it easier to say no to fattening sweets and snacks.
  • Lose weight permanently! Never diet again! Even if you’re successful in taking weight off, permanent weight loss requires permanent lifestyle changes. Don’t trust any product that promises once-and-for-all results without ongoing maintenance.
  • Just take a pill! Doctors, dieticians and other experts agree that there’s simply no magic way to lose weight without diet or exercise. Even pills approved by FDA to block the absorption of fat or help you eat less and feel full are to be taken with a low-calorie, low-fat diet and regular exercise.
  • Lose 30 pounds in 30 days! Losing weight at the rate of a pound or two a week is the most effective way to take it off and keep it off. At best, products promising lightning-fast weight loss are a scam. At worst, they can ruin your health.
  • Everybody will lose weight! Your habits and health concerns are unique. There is no one-size-fits-all product. Team up with your health care provider to design a nutrition and exercise program suited to your lifestyle and metabolism.
  • Lose weight with our miracle diet patch or cream! You’ve seen the ads for diet patches or creams that claim to melt away pounds. Don’t believe them. There’s nothing you can wear or apply to your skin that will help you lose weight.

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