Student Loan Scammer Settles With FTC For $11M

The leader of a student loan debt relief scheme has agreed to settle with the Federal Trade Commission’s (FTC’s) charges that he stole $11 million from consumers.

According to the FTC’s November 2018 complaint, Tuan Duong, among others, “falsely promised to reduce students’ monthly loan payments, or to eliminate or reduce their educational debts, but widely failed to deliver those services. The defendants also allegedly promoted a 96 percent success rate in reducing consumers’ student loan payments. In fact, the FTC alleged, the consumers who purchased these services often did not receive any debt relief, and lost hundreds of dollars. The FTC also alleged that the defendants charged consumers illegal upfront fees of $300 or more for these purported debt relief services. At the request of the FTC, a federal court temporarily halted the scheme and froze its assets,” according to a press release.

This isn’t the first time Duong has been sued by the FTC. In 2015, Duong was one of the defendants of Operation Mis-Modification, a joint federal-state enforcement initiative against six mortgage relief operations. The agency charged that they preyed on distressed homeowners by claiming that they could typically lower homeowners’ mortgage payments and interest rates or prevent foreclosure, as well as illegally charging advance fees.

“Mortgage relief schemes like these target people who are already having financial problems, and, all too often, inflict even further harm on them,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection at the time. “We’re determined to stop operations that illegally charge upfront mortgage relief fees or make empty mortgage relief promises.”

The following year, the court granted the FTC’s motion for summary judgment against Duong, and eventually banned him from advertising, marketing or promoting debt relief services, or misrepresenting any fact material to consumers related to any product or service.

Under this latest modified court order, Duong admitted that he violated the 2016 order, and is now permanently banned from the telemarketing industry. The order also contains a judgment of $11,000,215.25 as compensatory relief to the FTC.