The Federal Trade Commission (FTC) has intervened to stop a scheme that allegedly defrauded student loan borrowers of millions by pretending to be associated with the U.S. Department of Education. The scheme involved collecting illegal advance fees and making deceptive claims, violating the FTC’s Impersonation Rule.
At the FTC's request, a federal court temporarily halted the operation and froze its assets in an effort to end these deceptive practices. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated: “The defendants promised consumers student debt relief and forgiveness but gave them virtually nothing, keeping over $10 million for themselves and leaving consumers deeper in debt.”
According to the complaint filed by the FTC, since January 2023, Nevada-based Superior Servicing and its operator Dennise Merdjanian engaged in telemarketing and mailed communications falsely promising loan consolidation benefits. They charged illegal advance fees up to $899 followed by monthly payments which they misrepresented as going towards student loan debt.
To legitimize their claims, operators pretended affiliation with the Department of Education or its approved servicers. In some cases, they advised borrowers to cease payments to existing servicers while claiming they would take over servicing responsibilities. However, borrowers reported not receiving any promised services such as loan consolidation or forgiveness.
The FTC charged that these actions violated multiple regulations including the Impersonation Rule and Telemarketing Sales Rule. The U.S. District Court for Nevada issued a temporary restraining order on November 22, 2024, followed by a preliminary injunction against Superior Servicing on December 6, 2024.
John O’Gorman, Luis Gallegos, and Reid Tepfer are leading this case from the FTC’s Bureau of Consumer Protection. The commission unanimously authorized filing this complaint when it found reasonable belief of legal violations with public interest implications.
The Federal Trade Commission aims to promote competition while protecting consumers through education efforts. For more information on consumer protection topics or reporting frauds visit consumer.ftc.gov or ReportFraud.ftc.gov.
