Student-loan borrowers get $9 million in refunds after a debt relief scam

Student-loan borrowers

The Federal Trade Commission (FTC) and the Department of Justice (DOJ) announced on Tuesday that they will be sending over $9 million in refunds to more than 22,000 student-loan borrowers who fell victim to a debt relief scam. The refunds are part of a settlement with Ameritech Financial, a company that was accused of charging illegal fees and making false promises to borrowers.

How Ameritech Financial scammed borrowers

According to the FTC, Ameritech Financial operated a “student loan debt relief scheme” that deceived borrowers into paying up to $800 in upfront fees and $49-99 in monthly membership fees for debt relief services. The company claimed to be affiliated with the Education Department and promised to reduce or eliminate borrowers’ student loan debt.

However, the FTC said that Ameritech Financial did not provide any meaningful debt relief services and instead enrolled borrowers in federal income-driven repayment plans that are available for free from the government. The company also told borrowers that their monthly fees would go toward their student loan balances, but that was not true.

The FTC filed a complaint against Ameritech Financial and its owner, Brandon Frere, in 2018. In 2020, the FTC banned the company from providing debt relief services and obtained a $27.6 million judgment against Frere. The same year, Frere was sentenced to 42 months in prison for wire fraud.

How borrowers will receive their refunds

The FTC and DOJ said that they will be mailing refund checks to 22,562 borrowers who paid for Ameritech Financial’s services. The average refund amount is $398. The checks will expire after 90 days, so recipients should deposit or cash them as soon as possible.

Borrowers who do not have an address on file will receive a payment via PayPal. They should look for an email from with the subject line “You have money!” The email will contain instructions on how to claim the payment.

Borrowers who have questions about the refunds can contact Rust Consulting, which contracts with the FTC to facilitate payments, at 1-833-579-3126.

How to avoid student loan debt relief scams

The FTC and the Education Department warned borrowers to be wary of any companies that charge fees for student loan debt relief services, as they are likely scams. Borrowers can apply for federal repayment plans, forgiveness programs, and other options for free through their loan servicers or the Education Department’s website.

The FTC advised borrowers to look out for these red flags of student loan debt relief scams:

  • Requests for upfront or monthly fees
  • Promises of immediate or total loan forgiveness or cancellation
  • Claims of special access to government programs
  • Requests for personal or financial information
  • Pressure to sign up or act quickly
  • Misrepresentation of their identity or affiliation

Borrowers who encounter a student loan debt relief scam can report it to the FTC at


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