FTC Obtains Temporary Restraining Order Against Alleged Student Loan Debt Relief Scheme
Summary
Sheppard Mullin attorneys summarize the FTC's April 16, 2026 announcement that it obtained a temporary restraining order against a debt relief operation for alleged deceptive student loan relief practices. The complaint alleges the company engaged in telemarketing campaigns since at least February 2022, misrepresenting loan forgiveness outcomes, falsely implying government affiliation, charging prohibited upfront fees, calling consumers on the National Do Not Call Registry, and directing consumers to stop loan payments without adequate disclosure of negative consequences.
“The temporary restraining order freezes assets, appoints a temporary receiver, and is intended to stop the alleged scheme while the case proceeds.”
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What changed
The FTC obtained a temporary restraining order against a debt relief operation that allegedly marketed student loan debt relief services through deceptive telemarketing campaigns targeting consumers nationwide since at least February 2022. The complaint alleges violations of the FTC Act, the Telemarketing Sales Rule, the Impersonation Rule, and the Gramm-Leach-Bliley Act, with specific allegations including misrepresenting loan forgiveness outcomes, falsely claiming government affiliation, collecting prohibited upfront fees, calling consumers on the Do Not Call Registry, and directing consumers to stop loan payments. The TRO freezes assets and appoints a temporary receiver.
Companies offering debt relief or credit repair services should monitor how regulators are applying impersonation and data access theories in enforcement actions, as these claims may expand compliance expectations beyond traditional telemarketing rules. The FTC's focus on unfair and deceptive debt relief practices signals heightened scrutiny for firms in this sector.
Archived snapshot
Apr 25, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
April 24, 2026
FTC Moves to Halt Alleged Student Loan Debt Relief Operation
A.J.S. Dhaliwal, Mehul Madia, Maxwell Earp-Thomas Sheppard, Mullin, Richter & Hampton LLP + Follow Contact LinkedIn Facebook X ;) Embed
On April 16, the FTC announced that it obtained a temporary restraining order against a debt relief operation over allegations that it engaged in deceptive student loan relief practices in violation of the FTC Act, the Telemarketing Sales Rule, the Impersonation Rule, and the Gramm-Leach-Bliley Act.
The complaint alleges that, since at least February 2022, the company marketed student loan debt relief services through outbound telemarketing campaigns that targeted consumers nationwide. Specifically, the FTC alleges that the operation:
- Misrepresented loan forgiveness outcomes. The company allegedly claimed it could secure student loan forgiveness for consumers, despite not obtaining such results for most.
- Falsely implied government affiliation. Telemarketers allegedly represented that they were affiliated with the U.S. Department of Education or loan servicers, despite no such relationship.
- Charged prohibited upfront fees. The complaint alleges that the company collected upfront and recurring fees for debt relief services before achieving any settlement or modification of consumer debt.
- Engaged in deceptive telemarketing practices. The company allegedly called consumers on the National Do Not Call Registry, failed to provide accurate caller identification information, and used misleading sales tactics.
- Directed consumers to stop loan payments. The company allegedly instructed consumers to stop paying their loan servicers without adequately disclosing the potential negative consequences.
- Obtained consumer financial information through misrepresentations. The FTC alleges that the company used false statements to obtain bank account and payment information from consumers. The temporary restraining order freezes assets, appoints a temporary receiver, and is intended to stop the alleged scheme while the case proceeds.
Putting It Into Practice: The FTC continues to focus on unfair and deceptive debt relief and credit repair practices (previously discussed here). Companies offering debt relief or similar services should also monitor how regulators are applying impersonation and data access theories in enforcement actions, as these claims may expand compliance expectations beyond traditional telemarketing rules.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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