NEWARK - Attorney General Christopher S. Porrino and the New Jersey Division of Consumer Affairs announced today that the Division has reached a settlement with a for-profit company that offered student loan consolidation services to New Jersey consumers despite not being properly licensed to provide these services in New Jersey. The settlement will provide $119,606 in full restitution to 95 New Jersey consumers who used these services.
Student Loan Resolve will pay the restitution directly to the consumers in eight installments between June 15, 2017 and March 15, 2019, according to a Consent Order filed on June 7, 2017.
The Division alleged that the Texas-based Consumer Financial Resources, d/b/a "Student Loan Resolve," violated the New Jersey Consumer Fraud Act by offering services related to consolidating student loans, while it was not licensed as a debt adjuster with the New Jersey Department of Banking and Insurance. Pursuant to the Debt Adjustment and Credit Counseling Act, only certain non-profit companies can act as a debt adjuster in New Jersey. Through the Consent Order, Student Loan Resolve agreed to stop offering its services to New Jersey consumers.
"The 95 New Jerseyans who did business with this unlicensed company will receive all of their money back under this agreement," said Attorney General Porrino. "Conducting business in the shadows and without a license is unacceptable. If Student Loan Resolve wants to do business in New Jersey, it must follow our laws and procedures."
"This settlement provides full restitution for those who were using Student Loan Resolve's services," said Steve Lee, Director of the Division of Consumer Affairs. "It also sends a message that our consumer fraud laws are important safeguards when it comes to proper oversight of businesses that offer various services to consumers in connection with their student loans."
Student Loan Resolve charged consumers an initial fee of $190 and a recurring monthly fee of $19.90 for every month consumers were enrolled in their program, which consisted of consolidation of their loans through the U.S. Department of Education, and re-certification of their information for income-based repayment plans. The Division alleged that 95 New Jersey consumers were being charged for the company's services as of December 2016. The $119,606 represents the amount the New Jersey consumers had paid Student Loan Resolve in initial and recurring fees.