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CFPB seeks to ban operator of student loan relief scam reboot

The CFPB has taken action against the owner of a student-loan debt relief company for allegedly withdrawing hundreds of thousands of dollars from student borrowers’ bank accounts, without authorization. The CFPB alleges that Frank Gebase, Jr. controlled a company that took the borrowers’ money after obtaining their names and account information from a previous student-loan debt-relief scammer that the CFPB shut down. The CFPB’s proposed settlement, if entered by the court, would ban Gebase from the debt-relief industry and order him to pay a penalty.

As alleged in the complaint, Gebases' company, Processingstudentloans, collected recurring fees from customers, typically $39 per month, without authorization, stealing hundreds of thousands of dollars in total fees from hundreds of student loan borrowers from May 2016 to April 2017.

In March 2017, Processingstudentloans stopped collecting fees from borrowers, and on April 5, 2017, Gebase closed Processingstudentloans after having unlawfully debited over $240,000 from hundreds of student borrowers' accounts.

The Bureau's proposed settlement with Gebase would require him to pay a $175,000 civil money penalty and to stop participating in debt-relief products and services, financial advisory, and related products and services.

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