Color of Money: Don't fall for student loan relief scams
WASHINGTON -- If you're in the market to buy a home, you might hear a real estate professional say it's all about "location, location, location."
Those in the business of deceit also look for the best location -- but not necessarily a physical place. For scammers, it's all about where they'll get the most money victimizing people. And one of the hottest places to be right now involves student loans, which are at an all-time high of $1.4 trillion.
Lots of folks are struggling to handle education debt. Even those who are managing their loan payments want out -- and fast.
Last week, the Consumer Financial Protection Bureau (CFPB) released its annual Student Loan Ombudsman Report. The consumer watchdog agency said it has handled 20,600 federal and private student loan complaints from September 2016 through August 2017. During the same period, the bureau handled about 2,300 debt-collection complaints about private and federal student loans.
The CFPB says it's been able to return $750 million since 2011 to borrowers harmed by dishonest practices and loan-servicing failures.
Borrowers complained about overly aggressive -- and, in some cases, illegal -- debt-collection practices. For example, a debt collector can offset federal loan payments by attaching Social Security retirement payments. This is not the case with private student loans.
If you've got a loan issue, the CFPB may be able to help. You can submit a complaint online at www.consumerfinance.gov.
Last week, I was happy to see that the Federal Trade Commission has partnered with 11 states and the District of Columbia to combat deceptive student debt-relief scams. The crackdown is called "Operation Game of Loans."
As a fan of the "Game of Thrones" books and HBO series, I think the campaign enforcement title is spot-on. Throughout the series, the characters in this fantasyland dread the looming cold, harsh season, which requires preparation and vigilance.
"Winter is coming for debt-relief scams that prey on hardworking Americans struggling to pay back their student loans," said Maureen K. Ohlhausen, acting chairman of the FTC.