The Consumer Financial Protection Bureau released letters Monday asking major search engines Google, Yahoo and Bing to work with state and federal regulators to crack down on scammers targeting student loan debtors through search advertising.

The $1.2 trillion student loan industry is an attractive target for scammers because of its size and often desperate debtors. Borrowers struggling to repay student loans often turn to search engines with simple phrases such as "student loan relief” and "student debt forgiveness," the CFPB letter said. Advertising on the results pages often direct struggling borrowers to potentially illegal schemes.

While many search engines have policies to protect consumers against misrepresentations in advertisements, the CFPB urges the companies to work with regulators to ensure debt relief companies are not implying an affiliation with the Department of Education or other federal government agencies.

Common daily search results for “student loan forgiveness” direct people to websites charging several hundred dollars in upfront fees simply to file paperwork, while guaranteeing loan forgiveness. These sites typically file a few pages of paperwork for borrowers to enroll in income-based repayment plans and don't involve any loan forgiveness. Such paperwork is free and simple and meant to be filled out by borrowers themselves.

"This bears a close resemblance to the foreclosure crisis, where borrowers were given conflicting information about their options and found scammers who made false promises on loan modifications in exchange for upfront fees," the letter states. Back then, Google worked with the Inspector General’s office to shut down mortgage scam websites that had advertised with the search engine. 

"By more closely monitoring advertising on key search terms and helping to drive traffic toward unbiased sources of information, your users will gain greater value from your search products and scammers will be less likely to flourish,” the letter [PDF] to Google states.

The Education Department offers several plans to borrowers with federal student loans to make payments more affordable. These include options that let borrowers set their monthly payment based on their income. Monthly payments under these plans can be as low as zero dollars per month for unemployed or very low-wage borrowers. The Education Department doesn't charge fees to apply for or enroll in these plans, for which many student loan borrowers qualify.

Last December, the CFPB released a special advisory warning consumers to be on the lookout for such scams.


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