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The Illinois attorney general has sued Broadsword Student Advantage LLC and its owner, alleging they misled consumers and charged for debt-relief services available for free.
Broadsword agents got customers to sign sweeping power-of-attorney agreements, the 2014 complaint alleges. The agents got borrowers to give them loan-account access, and then limited communication between consumers and debt servicers, it asserts.
The attorney general alleges that the Texas company secretly channeled customers’ fees to a sister financial-planning firm, Affordable Life Plans. Litigation continued in Champaign County Circuit Court at the time of this Watch List posting.
Broadsword provided “nothing more than phantom help,” the attorney general alleged in the suit. “By taking precious time and money from financially distressed student loan debtors without providing any meaningful services, defendants place consumers at greater risk of serious financial harm.”
Broadsword owner Kenneth L. Talbert is fighting the suit and denies all accusations.
At the time of this Watch List posting, the Better Business Bureau had given Broadsword Student Advantage an “F” rating.
Enforcement actions: In the suit, the Illinois attorney general seeks to fine Broadsword $60,000 per violation and force the company to refund consumers.
The attorney general alleges that Broadsword:
- Charged consumers a $499.99 upfront fee and $49.99 recurring monthly fee and, without telling them, directed money to Affordable Life Plans, a registered investment advisory firm and sister company to Broadsword
- Failed to disclose that the programs the company advertised were available for free through the U.S. Education Department
- Asked customers to sign a limited power of attorney granting Broadsword authorization to make decisions and take actions on behalf of customers
- In an interview with NerdWallet for this article, Talbert denied charges that the company conducted debt adjustment. “All the company did was fill out forms for people,” Talbert said. He called the suit politically motivated and said it put Broadsword out of business.
- Talbert said the only entities Broadsword hurt were loan-servicing companies, by removing borrowers from expensive payment plans profitable for the servicers. “Now there are some crooks,” he said. “All Broadsword was doing was trying to help people.” Asked whether Broadsword secretly channeled fees to the financial-planning company, as the attorney general alleged, Talbert terminated the interview.
- What the company claims to provide: Loan document preparation
Based: Frisco, Texas
Management: Kenneth L. Talbert, sole governing member. Talbert has personally amassed nearly $2 million in federal tax liens since 2006, according to public records.
Talbert is also listed as chief executive officer of Debt XS and Debt Relief Options. Other businesses include Broadsword Financial LLC, Broadsword Insurance Agency LLC, Clear Debt Results LLC, Debt XS I LLC, DebtXS Management LLC, DRO, DXS, DXS Financial Recovery LP, DXS LMS Management LLC, DXS Loss Mitigation Services LP, EFA Processing, EFA Data Processing LP, World Law Options, DXS Mortgage Management LLC, DXS LMS Management LLC, DXS Technology Management, American Consumer Credit Research and Education, XTRA Marketing Services Management LLC, Eckity First Associates Inc., Affordable Life Plans LLC, Braxton Downs LLC, CX Management LLC, CocoaLife of Texas LLC, CocoaLife LP, Cure Management LLC, DR Options LLC, JBKT Management LLC, LibertyNow LLC, LibertyPlan LLC, NextWare Property Inc., RequestEx LLC, RequestEx Management LLC, Sapient Insurance Agency LLC, SCA Advisors LLC, Talon Lead Management LLC, Ultra Tri-Slim LLC and Xtra Marketing Services Management LLC.
Sources: Illinois attorney general’s office, Champaign County Circuit Court, Texas business filings, Kenneth L. Talbert interview