Attorney General Madigan Files Suit Over Student Loan Debt Scams

 Attorney General Lisa Madigan today filed lawsuits targeting a new industry of student loan debt scams that seek to exploit people struggling to repay their debt. The lawsuits are the first in the nation to crack down on an emerging industry of scam operations charging large upfront fees for bogus services or for government services that are already free of charge.

 

Madigan filed the suits earlier today against First American Tax Defense LLC, based in Chicago, and Broadsword Student Advantage LLC, based in Frisco, Texas, alleging the unlicensed companies engaged in deceptive marketing practices and illegally charged consumers hundreds of dollars in upfront fees to reduce or eliminate their student loan debt burden. In reality, Madigan alleges, the companies sought to scam vulnerable people into paying as much as $1,200 upfront for bogus services, including assistance enrolling in a fake “Obama forgiveness program,” or for government services that are already free of charge.

 

“These companies illegally charge fees for services that student loan borrowers can obtain themselves through government programs at no cost,” Madigan said. “My office will be aggressive in cracking down on scam operations that prey on student loan borrowers for profit.”

 

Student loan debt levels have grown to historic proportions, now affecting nearly 40 million Americans who have $1.2 trillion in outstanding debt. Madigan’s lawsuits targeting these scam operations allege that First American and Broadsword Student Advantage are doing an end-run around an Illinois law that she wrote to ban companies from charging people upfront fees for so-called debt settlement services.

 

Madigan’s lawsuits allege First American and Broadsword Student Advantage have advertised heavily on the radio in Chicago and downstate, offering consumers a myriad of options to ease their debt burden based on the companies’ alleged expertise and false affiliation with the U.S. Department of Education to consolidate or forgive their loans. The companies are alleged to offer to cut student loan payments in half or eliminate them entirely, and specifically offer public service employees a loan debt forgiveness program for which the companies could not qualify them. The lawsuit against First American specifically advertises an “Obama forgiveness program” that is not an actual government program.

 

The lawsuits allege the companies are in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, the Credit Services Organizations Act, and the Debt Settlement Consumer Protection Act. In 2010, Madigan crafted and helped pass the Debt Settlement Consumer Protection Act to ban companies from charging upfront fees to consumers for help with debt relief. Today’s lawsuits allege the companies are not complying with the requirements of the Debt Settlement Consumer Protection Act and in addition are not providing any meaningful assistance to reduce consumers’ student loan debt.

 

In announcing the lawsuits, Madigan urged current and former students never to pay upfront for help with student loan debt relief. For information on legitimate sources of free assistance, consumers can contact the Consumer Financial Protection Bureau or the National Consumer Law Center. For problems with your student loan servicer or a debt collector, consumers can also contact the U.S. Department of Education’s Student Loan Ombudsman at 1-877-557-2575 or www.ombudsman.ed.gov, the Consumer Financial Protection Bureau or Attorney General Madigan’s Consumer Fraud Hotline at 1-800-386-5438.

 

“We applaud the Attorney General for cracking down on scammers targeting student loan borrowers,” said Dev Gowda of Illinois Public Interest Research Group. “Consumers experiencing problems with their student loans such as fraudulent activity should bring their complaints to the Attorney General’s office, and also to the Consumer Financial Protection Bureau, which our report, ‘Private Loans, Public Complaints’ has found to get real results for students.”

RAUNER TO RELEASE TAX INFO, CALLS ON GOV TO OPEN UP ON NRI

Press Release from the Rauner Campaign, July 8, 2014

Bruce Rauner today pledged to release his 2013 tax returns and called on Pat Quinn to directly answer critical questions about the Neighborhood Recovery Initiative:

“Seven months ago, I was happy to pro-actively release three years of tax returns, disclose every company that does business in the state and pledge to put all my assets in a blind trust when I am elected, and I look forward to releasing my 2013 returns when they are ready.

While I’ve gone above and beyond what is required, Pat Quinn is refusing to answer critical questions about his failed $55 million anti-violence program. Pat Quinn needs to release all documents and emails pertaining to the Neighborhood Recovery Initiative.

Pat Quinn also needs to explain why he waited until the Fourth of July to disclose months-old federal grand jury subpoenas of his senior staff. He needs to come clean about why and how his senior staff approved a day care center to provide felon re-entry services. And he owes the taxpayers an explanation about why his administration paid $800,000 to the Woodlawn Organization, despite years of acknowledged financial irregularities. Taxpayers deserve to know how this all happened and the only way to find out is for Quinn to release all the documents in question.”

Senate President Cullerton Responds to Supreme Court Ruling in Kanerva v Weems

Senate President John J. Cullerton issued the following statement in response to the Supreme Court ruling in Kanerva v. Weems, 2014 IL 115811:

“Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says.  

The Court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.  

The Clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.

If the Court’s decision is predictive, the challenge of reforming our pension systems will remain.  

As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution.”

IL Supreme Court Says Healthcare Benefits for Retirees Protected Under the Diminishment Clause of the Constitution

THIS IS HUGE NEWS, and not good news for those in State Government trying to get a handle on the rising cost of pensions and benefits to workers and retirees.    The Illinois Supreme Court just issued a ruling that HEALTH INSURANCE COVERAGE is a benefit akin to Pension benefits, and therefore the healthcare coverage for beneficiaries cannot be diminished.

 Here is a line from the IL Supreme Court's ruling
"We conclude that the State’s provision of health insurance premium subsidies for retirees is a benefit of membership in a pension or retirement system within the meaning of article XIII, section 5, of the Illinois Constitution,"

Here is a link to the entire ruling by the Court in the case of Kanerva v Weems

http://www.state.il.us/court/Opinions/SupremeCourt/2014/115811.pdf

Sheri Jesiel Sworn-In Today as Illinois Representative in the 61st District

July 2, 2014

Sheri Jesiel is set to be sworn into office as a new state representative, to replace Rep JoAnn Osmond, who submitted her resignation recently.  That resignation became effective on July 1.


Jesiel was already the Republican nominee seeking election to the House in the 61st District.  Her appointment to fill Osmond's vacancy now allows her to run under the title of being the incumbent, although the House will not meet again until after the Fall election.  

Jesiel will face Democratic candidate Loren Karner in the fall election.