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A federal judge’s decision to uphold claims by the Consumer Financial Protection Bureau (CFPB) against a financial aid provider is being heralded as a win for student borrowers swindled out of $4 million.
On Monday, U.S. District Judge Gonzalo Curiel delivered a partial summary judgement against Global Financial Support Inc., known to students as “Student Financial Resource Center” and “College Financial Advisory.”
Judge Curiel also ordered a $10 million penalty and refunds of the $4 million to the students who were scammed.
Nearly six years ago, the Consumer Financial Protection Bureau (CFPB) filed a federal complaint against the company and its CEO, Armand Aria, alleging fraudulent practices.
CFPB Director Richard Cordray said the company was tricking students into believing the business was affiliated with universities and federal student loan programs.
Global Financial Support Inc. “scammed thousands of students by masquerading as government agencies and other trusted organizations,” Corday said in a statement. “Students and families were looking for information on how to pay for college, instead they were illegally charged millions of dollars for sham financial services,”
The alleged scheme was simple, but effective: Prey on parent and student anxiety over tuition by offering to do the heavy lifting for a fee ranging from $59 to $78.
Expecting tailored information on financial aid packages, students instead were delivered generic booklets on widely published information, the CFPB claimed.
“In reality, many consumers receive nothing in exchange for their fee and the scheme reaps millions of dollars in illegal fees,” Corday said.
In addition to not offering anything of value, Global Financial Support Inc. was found to be pressuring students and their families with fake deadlines and creating a false sense of urgency with their services, further exploiting consumers, the CFPB said.
Formally, the CFPB was accusing the company and its CEO of violating the Dodd-Frank Wall Street Reform and Consumer Protection Act. The initial complaint also accused Global Financial of violating federal privacy law.
Judge Curiel’s order sided in part with Global Financial about the material sent to consumers in 2016. The order found wording in an added section of those letters stated that students shouldn’t pay for their federal student aid applications.
Did you pay for student aid services from Global Financial, also known as “Student Financial Resource Center” and “College Financial Advisory?” Let us know in the comments below.
Counsel representing the CFPB in this lawsuit are its Enforcement Director Anthony Alexis and Deputy Enforcement Director for Litigation Cara Petersen.
The Global Financial CFPB Lawsuit is Consumer Financial Protection Bureau v. Global Financial Support Inc. et al, Case No. 3:15-cv-02440, in the U.S. District Court for the Southern District of California.
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4 thoughts on‘Sham’ Financial Aid Service Company Fined $10M for Scamming Students
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I got done by them also when my taxes was being taking every year for a student loan and the school was a fraud
Yes i did so put me on the list please