The CFPB has taken action to permanently ban Student Loan Pro and its owner, Judith Noh, from offering consumer financial products or services.
In a complaint, filed in the U.S. District Court for the Central District of California, the CFPB alleged that Student Loan Pro and Noh violated federal law when they charged borrowers upfront fees to file paperwork to access free debt-relief programs available to consumers with federal student loans. Those debt relief programs are offered by the U.S. Department of Education.
The CFPB’s stipulated judgment, if approved by the court, would require Noh to dissolve Student Loan Pro and a related business, FNZA Marketing, LLC, and pay a civil money penalty.
Student Loan Pro is a California sole proprietorship that was formed in 2015 by Noh. The company ran telemarketing campaigns to promote its debt-relief services to consumers with federal student loans.
The CFPB filed a lawsuit in 2021 alleging that Student Loan Pro, Noh, and Syed Gilani—Student Loan Pro’s manager and owner-in-fact—violated the FTC’s Telemarketing Sales Rule by requesting and receiving advance fees as high as $795 for its debt-relief services. The CFPB alleged that Student Loan Pro’s advance-fee violations cost consumers nearly $3.5 million.
The Telemarketing Sales Rule prohibits sellers and telemarketers from requesting or receiving advance fees for any debt-relief service before renegotiating, settling, reducing, or otherwise altering the terms of at least one of a consumer’s debts, and before a consumer has made at least one payment on such altered debt.
The proposed stipulated judgment, filed earlier this month, would resolve the CFPB’s claims against Student Loan Pro and Noh. As part of that stipulated judgment, in addition to the permanent ban on offering consumer financial products or services, the company and Noh would also be barred from doing any business with Gilani and would be prohibited from allowing Gilani to use their bank accounts (Gilani had previously been designated a co-signatory on all of Student Loan Pro’s bank accounts and merchant accounts). If approved by the court, the settlement would impose a civil penalty of only $2,000 because the company and Noh demonstrated an inability to pay more.