Atlanta-based Student Consulting Group Inc. is among five debt-relief firms sued this week by Illinois Attorney General Lisa Madigan.
The companies are accused of scamming people struggling to repay student-loan debt. Madigan said the companies charged borrowers stiff upfront fees with false promises of relieving borrowers’ debt loads or having them forgiven under programs endorsed by the Obama administration.
Micheal Crook, who is identified as Student Consulting Group’s president and chief operating officer, called the lawsuit “baseless” and “bogus.” The company solicited consumers as University of One and Help Assist Me Default Resolution Services.
“They claim we are charging people for things that can be done for free, and we do. Everybody has a right to hire someone to do something for them that they don’t want to do,” Crook said. “We explain this to clients and in no way hide that they could get these services for free someplace else. We think they choose us because they need someone they can trust.”
The lawsuit alleges the five firms are violating an Illinois law that bans companies from charging people upfront fees for so-called debt-settlement services.
Like Madigan, advocacy groups such as the National Consumer Law Center say the growing student loan debt-relief industry is taking advantage of borrowers who may be desperate and confused about bureaucracy involved in student-loan repayment.
Currently, about 40 million Americans owe more than $1.2 trillion in student loan debt.
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