FTC Gets Court Order to Shutter Superior Servicing in Student Debt Relief Case

The Federal Trade Commission (FTC) said Monday (Dec. 9) that at its request, a federal court halted and froze the assets of the operators of a scheme that allegedly bilked student loan borrowers while pretending to be affiliated with the Department of Education.

In response to the FTC’s complaint against Nevada-based Superior Servicing and its operator Dennise Merdjanian, the U.S. District Court for the District of Nevada entered a temporary restraining order on Nov. 22 and a preliminary injunction against Superior Servicing on Friday (Dec. 6), the FTC said in a Monday press release.

The FTC charged that the defendants violated the Impersonation Rule, the FTC Act’s prohibition on deceptive marketing, the Telemarketing Sales Rule and the Gramm-Leach-Bliley Act, according to the release.

“The defendants promised consumers student debt relief and forgiveness but gave them virtually nothing, keeping over $10 million for themselves and leaving consumers deeper in debt,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection said in the release. “The FTC will continue taking decisive action against those who prey on Americans with student debt.”

In an earlier, separate case involving student loans, the FTC said in July that a federal court halted the operations and froze the assets of the operators of USA Student Debt Relief (USASDR) after the regulator asked the court to issue the order.

The FTC alleged that the operators of USASDR pretended to be affiliated with the Department of Education and its loan servicers and made false promises to student loan borrowers.

“By pretending to be affiliated with the Department of Education and misrepresenting features of its free income-driven loan repayment programs, these scammers bilked millions from the consumers these programs were designed to help,” Levine said at the time in a press release.

In March, the FTC began sending millions in refunds to victims of a student loan fraud scheme that “used many names including Mission Hills Federal, Federal Direct Group, National Secure Processing and The Student Loan Group,” it said at the time in a press release.

The $4.1 million in payments were being sent to some 27,000 consumers who were duped by a fake loan forgiveness scam.