CFPB Files Suit Over Student Financial Aid Placement Scam

WASHINGTON — The Consumer Financial Protection Bureau is suing a California company accused of running a student financial aid placement scam.

In its complaint, filed in California Southern District Court, the agency accuses Global Financial Support, Inc. of tricking tens of thousands of students and their families into paying between $59 to $78 for personalized financial aid research that never materialized.

Since Jan. 2011, the company, operating as either Student Financial Resource Center or College Financial Advisory, has sent millions of letters slapped with fake seals or with university names to create the pretense of an affiliation with the schools' financial aid departments or with the government, according to the CFPB.

The letters also created a false sense of urgency by warning of fake deadlines beyond which a student would be no longer eligible for financial aid, the complaint notes. If customers paid the companies, they would receive a booklet containing no individualized information, if anything at all.

"Student Financial Resource Center and College Financial Advisory scammed thousands of students by masquerading as government agencies and other trusted organizations," said CFPB Director Richard Cordray in a press release released Thursday. "Students and families were looking for information on how to pay for college, instead they were illegally charged millions of dollars for sham financial services."

The CFPB is charging Global Financial Support and its owner, Armond Aria, of violating the Dodd-Frank Act's measures against deceptive practices, as well as federal privacy laws.