LA couple sued by FTC for preying on borrowers with student loan relief scam

America’s student loan crisis has made college graduates a common target of fraudsters. Now, a Los Angeles couple is in hot water with the Federal Trade Commission for a litany of scams that victimized former students who are buried in debt.

According to Courthouse News Service, the FTC officially filed suit against Tobias West, his wife Kamala, and five companies under the couple’s name in Federal Court on Feb. 16.

The Wests allegedly targeted “financially stressed” student loan recipients through eight websites, claiming that their companies worked with the U.S. Department of Education to reduce clients’ monthly payments and stop their wages from being garnished.

The couple charged $500 to $800 up front for their services, in addition to having their victims electronically sign agreements that authorized the Wests to charge them additional money. They also forced clients to sign over limited power of attorney to the couple, which the Wests used to enter forbearance deals with lenders without permission.

Often times, the Wests wouldn’t even bother to pose as their clients to speak with lenders. Instead, they would cease communication with the client altogether once the initial payment was received.

“In many instances, when consumers have contacted their lender, they have discovered that student debt relief defendants never contacted the lender,” the FTC complaint states.

The average college graduate in 2015 with student loan debt will owe a little more than $35,000. According to the Huffington Post, a whopping 40 million Americans currently hold student debt, which is four times greater than the entire population of Sweden.

Due to these substantial debts, many former students are targeted by con artists who promise to lower their monthly payments, if not eliminate their debt altogether. The scam is quite similar to the tactics used by mortgage fraudsters for the past several decades.

In fact, mortgage fraud was the Wests’ preferred scam before they turned their attention to student loan debt. Until 2014, the couple falsely advertised their business, AAP Firm & Associates, as a resource for clients who wished to lower their mortgage payments and interest rates.

The Wests claimed that AAP Firm & Associates was staffed with experienced attorneys who worked with lenders to achieve these lofty goals, which was a lie. Similar to their student loan scam, the couple would disappear shortly after receiving an initial payment of $1,000 to $5,000. 

All the Wests’ fraudulent companies operated out of a suite on Wilshire Blvd. in LA. Aside from seizing their assets, the FTC is seeking numerous penalties for violations of the FTC Act and the Telemarketing Sales Rule.

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