Global Financial Support, a student financial aid company, is facing a Consumer Financial Protection Bureau lawsuit for allegedly tricking consumers into paying for sham financial aid services and falsely indicating it was affiliated with government and academic institutions.
The CFPB filed the lawsuit Thursday accusing Global Financial and its owner, Armond Aria, of charging parents and students a fee for personalized help applying for financial aid that the company allegedly never provided.
“Defendants exploit consumers’ unfamiliarity, anxiety, and confusion about the Free Application for Federal Student Aid and the student financial aid process generally,” the CFPB’s complaint states.
The company operates Student Financial Resource Center and College Financial Advisory. Company officials did not return a call for comment.
In exchange for its services, the company asked for a fee of between $59 and $78. The company appeared as if it was affiliated with the government by including official-looking watermarks and seals on the letters and operating urls that end in “.org”, according to the CFPB. The letters also implied that families who did not submit the application and processing fee to the company would lose the opportunity to apply for financial aid, the CFPB claims.
"Student Financial Resource Center and College Financial Advisory scammed thousands of students by masquerading as government agencies and other trusted organizations,” CFPB Director Richard Cordray said in astatement. “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.”It's the second time in recent months that the CFPB took action on this issue. In July, the agency ordered a company that offered help applying for financial aid to pay $5.2 million over allegations it placed customers into an illegal recurring billing scheme.
Student Financial Aid Services was charged with engaging in deceptive sales and billing practices, according to the complaint. The CFPB stated that the company lured customers with misleading information about the cost of its services, then charged automatic, recurring annual fees. The Sacramento, Calif.-based company operates websites including FAFSA.com and SFAS.com, and related call centers, and offers fee-based assistance to consumers filling out the federal government’s Free Application for Federal Student Aid.