washington dc – Today, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against the owner of a student loan debt relief company for allegedly withdrawing hundreds of thousands of dollars without authorization from student borrower bank accounts. . The CFPB alleges that Frank Gebase, Jr. controlled the company that received the borrower’s money after obtaining the borrower’s name and account information from a former student loan debt relief scammer that the CFPB shut down. . If the CFPB’s proposed settlement goes to court, Gebase would be banned from the debt relief industry and ordered to pay a fine.
“Frank Gebase has brazenly relaunched a student debt relief scam that the CFPB shut down over six years ago,” said Rohit Chopra, director of the CFPB. “When student loan servicers fail to provide borrowers with clear and accurate information, scammers are ready to swoop in.”
On March 30, 2016, the CFPB student support organization Suspend debt relief business and cancel all consumer contracts. The order resolved his CFPB findings that the Student Aid Association violated the Federal Consumer Financial Protection Act. This includes charging illegal upfront fees for student loan debt relief services or making false promises to borrowers about potential savings from reduced payments or loan forgiveness. Gebase leases his office space to his Student Aid Institute, of which he was a longtime associate. In 2016, shortly before his CFPB order to the Student Assistance Association, Gebase founded his Processingstudentloans in San Diego, California. Gebase was the founder, sole owner, CEO and sole company officer of Processingstudentloans.
The CFPB alleges that from approximately May 20, 2016 to approximately April 5, 2017, Processingstudentloans was a non-bank provider of student loan debt relief services, including reauthorization. on behalf of the borrower. Processing student loans didn’t attract new customers. Instead, the CFPB claims it obtained student loan account and billing information from hundreds of borrowers who were former Student Aid Institute customers without their knowledge or consent. Student Loan Processing did not enter into a contract or agreement with the borrower. As alleged in the complaint, Processingstudentloans collected recurring fees (typically $39 per month) from customers without authorization and stole fees totaling hundreds of thousands of dollars from hundreds of student loan borrowers. .
In March 2017, Processingstudentloans stopped collecting fees from borrowers and on April 5, 2017, Gebase closed Processingstudentloans.
The CFPB alleges that Gebase harmed student loan borrowers by making unauthorized debits from borrowers’ bank accounts. Gebase significantly assisted in withdrawing unauthorized funds from student borrower bank accounts. In addition to managing student loan processing and facilitating debits, Gebase knew or should have known that debits were unauthorized and illegal. By April 2017, under this scheme, Gebase’s company had illegally debited her more than $240,000 from the accounts of hundreds of student borrowers.
Under the Consumer Financial Protection Act, the CFPB has the power to take action against any entity or individual who violates the Consumer Financial Protection Act. If the proposed settlement is entered by the court, Gebase must:
- Pay a fine of $175,000: Gebase paid the CFPB a $175,000 penalty, which the CFPB CFPB Victim Relief Fund.
- Stop participating in debt relief or other activities: Gebase is permanently prohibited from providing or providing any debt relief products or services, financial advisory services, and other related products and services as set forth in the Proposed Provisions Final Judgment and Order.
Read today’s Complaint and the Final Judgment and Order of the Proposed Provisions.
The CFPB Victim Relief Fund is used to compensate eligible injured consumers. The CFPB will work to provide full relief to eligible injured consumers from the Victim Relief Fund.
For borrowers preparing for college, attending school, or already paying off their student loans, the CFPB has tools and resources To help them make important loan decisions.
Consumers may submit complaints about student loan services or debt relief services, or complaints about other financial products and services, by visiting the following websites: CFPB website Or call (855) 411-CFPB (2372).
The Consumer Financial Protection Bureau is a 21st-century agency that implements and enforces federal consumer finance laws and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, see: consumerfinance.gov.