July 12, 2024 – Amended Preliminary Injunction Entered
After the hearing on July 8, 2024, the Court entered an Amended Preliminary Injunction against the Defendants which continues the terms of the TRO and confirms the Receiver’s appointment. All business operations of Defendants have been terminated. A copy of the Amended Preliminary Injunction can be found in the Documents section of this webpage.
The Federal Trade Commission will continue its lawsuit against the Defendants. If the Federal Trade Commission prevails in the lawsuit, the matter of refunds for customers will be an issue for the FTC and the Court to resolve and that may be a long way off.
As we previously stated, if you entered an agreement with any of the Defendant businesses (or were in contact with them), we urge you to immediately contact your student loan servicer to confirm the status of your loan and that no third party is authorized to represent you in connection with your student loan account. A list of approved student loan servicers can be found on the U.S. Department of Education website at: https://studentaid.gov/manage-loans/repayment/servicers. Additional information about repayment plans can be found at: https://studentaid.gov/manage-loans/repayment/plans.
July 2, 2024 – Notice of FTC Complaint and Temporary Restraining Order
On June 24, 2024, the Federal Trade Commission (“FTC”) filed a lawsuit against Panda Benefit Services, LLC, d/b/a Prosperity Benefit Services and d/b/a Prosperity Benefit Services, LLC; Clarity Support Services, LLC; Pacific Quest Services, d/b/a DocPrepPay.Com; Prosperity Loan Services LLC; Public Processing Services LLC; Quick Start Services, LLC; Select Student Services, LLC; and Signature Processing Services, Inc. a/k/a Signature Processing. The individuals named in the lawsuit are Eduardo Avalos Martinez; Emiliano Salinas, Jr.; Christopher Michael Hanson; and Melissa Salinas.
The companies offer student loan debt relief services and “membership benefits,” including the annual recertifications necessary for some student loans. They are based in Orange County, California, although some of the companies use virtual offices in Las Vegas, Nevada.
The FTC Complaint alleges that “Defendants have deceived consumers, many of whom are low-income borrowers saddled with thousands of dollars of student debt, into paying hundreds of dollars for services that are made up, not as described, or simply never materialize. . . . Defendants tell consumers that (1) Defendants will secure forgiveness of their student loan debt; (2) Defendants can obtain for consumers repayment plans that will lower their monthly payment amounts; (3) Defendants are loan servicers who will take over servicing their federal student loans; and (4) Defendants ‘work with’ or are otherwise affiliated with the government, including specifically the U.S. Department of Education (‘ED’).” A copy of the Complaint can be found on the Documents section of this webpage.
The Court entered a Temporary Restraining Order (“TRO”) on June 24, 2024 which prohibits any further unlawful conduct and appoints a Temporary Receiver to take possession and control of the businesses. The Temporary Receiver is an agent of the Court and is not affiliated with the FTC. The Temporary Receiver has suspended the businesses’ operations and is now conducting a review of the businesses.
The Court has scheduled a hearing for July 8, 2024 to determine whether a Preliminary Injunction should be entered. A Preliminary Injunction would continue the restrictions in the TRO until there is a trial of the case.
Consumer automatic payments of fees (sometimes called ACH payments) to the businesses have been suspended. If you entered an agreement with any of the defendant businesses (or were in contact with them), we urge you to immediately contact your student loan servicer to confirm the status of your loan and that no third party is authorized to represent you in connection with your student loan account. If you feel your federal student aid personal identification numbers (FSA PIN) has been compromised, we recommend that you change it. A list of approved student loan servicers can be found on the U.S. Department of Education website at: https://studentaid.gov/manage-loans/repayment/servicers.
At least until the date of the Preliminary Injunction hearing on July 8, 2024, it is likely these companies’ operations will remain suspended. We will post periodic updates to this website. If you have additional questions, please send them to info@regulatoryresolutions.com and reference the company involved. Please be aware it may take some time to receive a response.