More than 7,100 student-loan borrowers will get be getting refunds from a debt-relief company that illegally charged fees to reduce their federally funded loan balances, a consumer watchdog announced.
The Consumer Financial Protection Bureau said that 7,100 borrowers who used Timemark, a debt-relief company, were charged up to $695 in advance of their services, a violation of the Telemarketing Sales Rule.
Timemark charged borrowers “illegal advance fees” to reduce their federal student-loan balances when the U.S. Department of Education Department offered those services for free, the CFPB said.
The borrowers will share some $3.5 million.
“From 2016 through October 2019, the company used telemarketing campaigns to convince people with federal student loans to pay up to $699 in fees to file paperwork to reduce or eliminate their monthly payments, through loan consolidation, forgiveness, or income-driven repayment plans,” officials said in a news release.
The CFPB said Timemark violated the Telemarketing Sales Rule. The rule says it is illegal for a telemarketer to request or receive fees for debt-relief services before the consumer has made at least one payment using the new arrangement. Timemark violated that rule because it requested fees from borrowers within a few days of them enrolling in the new plan, the CFPB said.
A settlement was reached with Timemark in July 2020. Borrowers will be getting refund checks in the mail, administered by Epiq Systems.
According to the CFPB, borrowers who do not receive a check soon but believe they are eligible for one can submit a claim to CFPB-Timemark.org,
For further information, email info@cfpb-timemark.org or call 866-991-0913.
