A federal court has shut down a Florida-based operation that charged customers $1,200 up front and $50/month with allegedly false promises of getting their student loan payments reduced or forgiven, sometimes in the impossible timeframe of only three years.

There are numerous federal programs for lowering student loan payments or getting some of that debt forgiven (though Education Secretary Betsy DeVos is trying to get rid of several of them). All of these programs are free to apply for, but many of them have strict requirements that limit eligibility.

And yet, multiple businesses — Strategic Student Solutions, Strategic Debt Solutions, Student Relief Center, among others — all operated by a Florida man named Dave Green, advertised to student loan borrowers that they could “Lower your student loan payments today!” or get “Payments as low as $0 Monthly.”

However, a lawsuit [PDF] filed last week by the Federal Trade Commission alleges that Green and his companies were misleading student loan borrowers with false promises.

While websites run by the defendant may have included disclaimers like “Strategic Student Solutions is a document preparation company only,” the FTC says telemarketers and email sales pitches for these companies eschewed such qualifying statements.

According to the complaint, one follow-up email sent to a prospective customer stated that the company “will get you preapproved for Federal Government Programs that will forgive or eliminate your Federal student loan…. we are a forgiveness program that will ensure forgiveness.”

The FTC alleges that customers were often told that if they made the up front payment of $1,200 and then made monthly payments (typically around $50 each) for three years, their debt would be forgiven. Yet this money was not going to pay down the customer’s debts; instead, says the complaint, it was being kept by the defendants as a fee for their purported services.

Even if that money had been applied to student loan debt, the FTC notes that there are no federal repayment programs that will forgive a borrower’s debt in just three years. In fact, the typical forgiveness timeline for most current repayment plans is 20 years.

Customers of the defendants’ service told the FTC that they were instructed to not “contact, work with, make payments to, or respond to contacts from their loan servicers,” but instead to send any paperwork or bills to the defendants.

In spite of the advertised promises, the FTC says many customers saw no reduction in their loan payments. “In many instances, consumers have discovered that Defendants had not contacted their loan servicers at all,” reads the complaint.

There were some instances, notes the lawsuit, where the defendants did contact loan servicers, but just to put the loan into forbearance. This did nothing to reduce the customer’s debt or monthly payments, but the defendants continued to charge monthly payments, says the FTC, leading customers to unwittingly fall behind on their student loan payments or accrue interest.

When customers contacted the defendants to try to cancel, the FTC says the company frequently ignored or denied refund requests. Other customers were allegedly told they would have trouble being eligible for federal loan forgiveness programs if they backed out of the program.

The defendants are accused of violating the FTC Act’s prohibition against deceptive business practices, the Telemarketing Sales Rule’s ban on requesting advance payments for debt relief services, and other charges.

A federal court judge granted the FTC’s request for a temporary restraining order [PDF], which includes shutting down their websites.

“Consumers who paid Strategic Student Solutions for help with their student loans watched their situations go from bad to worse,” said Tom Pahl, Acting Director of the FTC’s Bureau of Consumer Protection. “The bottom line: never pay an up-front fee to a company promising to deliver debt relief.”

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