Claiming that many of the advertising being run on Facebook for student loans is fake, the Consumer Financial Protection Bureau has put pressure on Facebook to ban them – and it looks like Facebook has complied.
The letters from Rohit Chopra, the CFPB’s student loan ombudsman, say web analytics show stressed-out borrowers are searching on-line for help using those phrases. In the ads and search results that then appear on these advertiser-supported on-line platforms, scammers and dishonest businesses tell the borrowers that for a fee, they can help them enroll in a Department of Education renegotiation program – a program that is actually free.
“While we have warned consumers about these scams we are concerned that unscrupulous companies may be using aggressive advertising through search products to lure distressed borrowers,” Chopra wrote.
In response, Facebook has added the following addition to their policies:
26. Misleading Student Loan Services
Ads must not promote misleading or deceptive services related to student loan consolidation, forgiveness, or refinancing.
The Federal Trade Commission and the State of Florida has also taken action against two operations charged with running phony student loan debt relief schemes, and defendants in a similar FTC action brought earlier this year have agreed to a ban on participating in any debt relief business, as part of a consumer protection crackdown to combat such frauds.
“The FTC is not going to stand on the sidelines when it uncovers evidence of fraudsters targeting students,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Consumers should be wary of any company that claims it can eliminate or greatly reduce debt, especially if they ask for money in advance.”
Florida Attorney General Pam Bondi said, “The Federal Trade Commission has been a steadfast partner in our consumer protection enforcement efforts. These latest joint actions will help protect Floridians, as well as many across the country, from these companies’ unscrupulous debt relief operations and ensure that those responsible will be held accountable.”