FTC lawsuit claims Nevada company pocketed $10M in student loan payments
A lawsuit has been filed against a Nevada company accusing it of lying to consumers about their student loan debt relief services, pocketing $10 million in gross revenue.
The Federal Trade Commission is seeking a preliminary injunction against Superior Servicing LLC and manager Dennise Merdjanian with District Court on Dec. 6. The filing alleged the company also engaged in deceitful marketing and telemarketing schemes to sell their debt relief services.
“(The defendant) falsely represented that consumers who purchase Defendant’s Debt Relief Services will get enrolled in a loan consolidation program will consolidate their student loans and have their monthly student loan payments reduced,” the filing said.
Superior Servicing also “falsely represented” they were affiliated with the Department of Education, that their customers would receive loan forgiveness, and that the company would assume responsibility for the servicing of customers’ student loans, the filing said.
Efforts to reach Superior Serving on Tuesday were unsuccessful.
Six counts were brought against Superior Servicing: false claims of government and business affiliations, false statements to obtain customer information, material debt relief misrepresentations, charging advance fees and deceptive representations.
Also three violations were alleged: violating the GLB Act, which protects customers’ financials, the Telemarketing Sales Rule, which prohibits abusive and deceptive practices, and the Trade Regulation Rule on Impersonation of Government and Businesses.
In some cases, customers would pay $899 in advance fees, which they assumed went toward their student loans but were pocketed by the company, the FTC filing said. Then customers would pay $49 monthly payments, while the company falsely claimed it would pay down their balance.
“They do not enroll consumers in federal debt relief programs, reduce or eliminate their student loan payments or balance, or apply payments to consumers’ loans,” said the original complaint from the FTC filed on Nov. 18.
The company has an F rating with the Better Business Bureau, with over 200 complaints made against the company. Many of the complaints allege Superior Servicing is a “scam” and no payments have been made by the company toward their student loans.
Contact Emerson Drewes at edrewes@reviewjournal.com. Follow @EmersonDrewes on X.