The Federal Trade Commission (FTC) has intervened in a student loan debt relief scheme that defrauded consumers of more than $20.3 million, marking its first enforcement under the Impersonation Rule. The scheme, which falsely claimed affiliations with the Department of Education, has been temporarily halted by a federal court, which also froze its assets at the FTC's request.
“These defendants promised to lower student loan payments but then took millions of dollars from consumers and did nothing, leaving them in deeper debt,” stated Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue taking decisive action against those who exploit Americans struggling with student debt.”
The FTC’s complaint indicates that since June 2021, California-based Panda Benefit Services and its affiliated companies—including Prosperity Benefit Services, Clarity Support Services, Pacific Quest Services, and others—misled consumers into paying for non-existent loan forgiveness programs. The operators involved were identified as Christopher Hanson, Eduardo Martinez, Emiliano Salinas, and Melissa Salinas.
The FTC alleges that these entities falsely guaranteed loan forgiveness and significant reductions in loan payments. They purportedly took over the servicing of student loans and claimed affiliation with the Department of Education. Mailers sent by the operators used urgent language such as “FINAL NOTICE” and “Time Sensitive” to prompt consumer responses.
Consumers reported that after enrolling and making payments based on promises of expedited loan forgiveness, they received no such relief. Instead, operators collected illegal upfront fees while claiming to purchase loans from federal servicers—a falsehood used to acquire consumers’ bank account information.
Many borrowers only discovered the deceit months or years later due to a federal COVID-19 payment pause on student loans between March 2020 and October 2023. Contrary to their promises, the scheme’s operators neither obtained loan forgiveness nor lowered payments for consumers.
The Impersonation Rule empowers the FTC to combat scammers impersonating government agencies or businesses by filing federal court cases aimed at returning money to defrauded consumers and imposing civil penalties on violators. Besides this rule, defendants were charged with violating the FTC Act, Telemarketing Sales Rule, and Gramm-Leach-Bliley Act.
The Commission unanimously voted 5-0 to authorize filing the complaint. The U.S. District Court for the Central District of California issued a temporary restraining order on June 24, 2024.
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