Phony debt relief tops state scam list

Phony debt- relief companies topped the list of scammers shopping too- good- to- be- true offers to Illinoisans in 2015, with schemes targeting student loan borrowers rising fast, Attorney General Lisa Madigan said Monday.

Marking the start of “Consumer Protection Week,” Madigan said scams seem to track the economy, or rather, the losers in economic tumult.

“Since 2008, consumer debt has been No. 1,” Madigan said. “Prior to 2008, it was identity theft.”

With a weak job market, college graduates who were oversold by pricey for- profit colleges and stuck with college debt have become targets for scammers.

Out of the 25,000 consumer complaints the attorney general’s office received last year, 3,350 complaints were about overly aggressive collection agencies and scammers offering debt relief. Another 1,523 complaints were made against for- profit colleges and student loan hustles.

Madigan’s office also is investigating Navient Corp., the student loan servicing company formerly known as Sallie Mae, and last week filed a lawsuit against a Lombard company that claimed to help student loan relief assistance.

Madigan said Navient staff tend to steer students struggling to make payments into “deferments” of their payments, which allows students to put off making payments. But interest continues to pile up, and then is added into the principal once payments resume.

The AG’s office last week filed a lawsuit against National Student Loan Rescue, a Lombard company that claims to help borrowers reduce monthly payments, remove wage garnishments or even have loans forgiven. The suit alleges the company charges steep fees and does littlemore than paperwork.

The Chicago Sun- Times was unable to reach National Student Loan Rescue officials Monday.

Madigan’s office also offers a “Student Loan Helpline,” ( 800) 455- 2456, which offers assistance to student borrowers.