Consumer Bureau Action Tracker

CFPB v. Student Financial Aid Services, Inc.


State

Nationwide

target

Student Financial Aid Services, Inc.

Topics

Enforcement, Student Loans

In 2015, the CFPB sued Student Financial Aid Services, alleging that the company “illegally signed up consumers for student financial assistance and proceeded to automatically bill them annually.”_ The firm agreed to pay $5.2 million in restitution and a $1 civil penalty to the CFPB.

  • Cases 2:15-at-00821 and 2:15-cv-01581-GEB-KJN were filed in the U.S. District Court for the Eastern District of California Sacramento Division. Student Financial, a “Sacramento, Calif.-based” company, “operates call centers and websites such as FAFSA.com and SFAS.com to offer fee-based assistance for consumers who want to apply for the Federal Student Aid called FAFSA.” At the time, Student Financial was not directly associated with any government agency. [Rachel Witkowski, “CFPB Charges Firm Restitution, $1 Penalty (Yes, $1),” American Banker, 07/24/15]
  • “The_CFPB_filed a proposed consent order and complaint” against the firm for allegedly using “one of its websites, FAFSA.com, to lure consumers into a fee-based service in order to get advice on a federal student loan program that has a free application process.” The lawsuit alleged “that Student Financial did not properly disclose that consumers were signing up for a subscription and the fees that would be charged, nor did it get authorization to perform automatic recurring charges.” Charges “ranged from $67 to $85 per year.” [Rachel Witkowski, “CFPB Charges Firm Restitution, $1 Penalty (Yes, $1),” American Banker, 07/24/15]
  • In addition to agreeing “to pay $5.2 million” in a settlement, Student Financial Aid Services was required to pay a $1 civil penalty to the CFPB “because the company could not afford more.” In July 2015, the company transferred the “FAFSA.com Internet domain name to the U.S. Department of Education.” [Rachel Witkowski, “CFPB Charges Firm Restitution, $1 Penalty (Yes, $1),” American Banker, 07/24/15]

Status

Inactive or Resolved


2:15-at-00821, 2:15-cv-01581-GEB-KJN 7/23/2015 9/11/2015

CFPB Takes Action Against Student Financial Aid Services, Inc. for Illegally Recurring Billing Scheme
http://www.consumerfinance.gov/policy-compliance/enforcement/actions/student-financial-aid-services-fafsa-com/

  • Consumer Financial Protection Bureau (CFPB)
  • Federal district court case
  • U.S. District Court for the Eastern District of California Sacramento Division
  • Nonbank
  • $5,200,000
  • Not Available

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