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First American Student Aid and its owner were barred from doing business in Illinois and ordered to refund customers, under terms of a 2015 final judgment and consent decree.
The Illinois attorney general sued the company and owner Gustavo Montes in 2014, accusing them of charging upfront fees between $700 and $1,199 to do little more than complete federal loan-consolidation applications that consumers could fill out on their own for free.
The company advertised it would help student-loan borrowers lower their monthly payments, stop their wages from being garnished, provide access to loan-forgiveness programs and improve their credit scores, but it didn’t perform those services, the attorney general alleged.
“Employing high-pressure sales tactics, defendants target financially vulnerable consumers with student loan debt, in Illinois and throughout the United States,” the attorney general alleged.
Enforcement actions: In the court-ordered settlement, First American Student Aid agreed to never again do business in Illinois. The company agreed to dissolve all contracts with Illinois consumers and pay $40,000 in restitution, under the settlement instituted by a Cook County Circuit Court judge.
Montes, who denied any liability, agreed to settle without further litigation. The judgment banned his companies only in Illinois.
What the company claims to provide: Lowered monthly payments, relief from wage garnishments, loan forgiveness programs and help with preventing tax liens
Based: Delaware company with a principal office in Park Ridge, Illinois.
Management: Gustavo Montes, owner
Source: Illinois attorney general’s office, Illinois courts