In a shocking development, Prehired, an education outfit that allegedly exploited students with deceptive tactics, is facing legal action from the Consumer Financial Protection Bureau (CFPB) and multiple state attorneys general over its dubious student loans practices. The CFPB has teamed up with state regulators to address Prehired’s unlawful marketing strategies and predatory debt collection methods. The company is accused of misleading students with false promises about lucrative job prospects and using “income-share” loans to trap them in debt. Let’s delve deeper into the allegations and the enforcement action being pursued against Prehired.
Deceptive Marketing and False Promises
Prehired operated a 12-week online training program, enticing students with promises of entry-level positions as software sales development representatives, boasting “six-figure salaries” and a “job guarantee.” Allured by these prospects, applicants were directed to sign up for an “income-share” loan to finance the program’s costs. The catch? Prehired deceptively concealed terms that obligated students to make payments even if they failed to secure a high-income job through the program. This misleading marketing strategy burdened countless students with debt and led to widespread financial distress.
Unlawful Debt Collection Practices for Studen Loans
To compound the problem, Prehired employed unethical debt collection practices, as alleged by the CFPB and state attorneys general. When its Delaware debt collection lawsuits came under scrutiny, the company unilaterally altered students’ contracts, forcing them into arbitration without their consent. Additionally, Prehired sought to persuade students to sign settlement agreements that ostensibly appeared advantageous but actually relinquished their rights to challenge the original income-share loan’s job placement conditions. This maneuver made it challenging for affected consumers to dispute the terms and the validity of their debt.
The CFPB’s Action for Justice
The CFPB and state partners are now seeking to void the income-share loans, providing redress for the affected students. Moreover, they aim to impose a penalty on Prehired to hold the company accountable for its deceptive practices. The penalty amount will be directed toward the CFPB’s victims’ relief fund, providing restitution to those who suffered due to Prehired’s illegal student lending practices.
The joint action taken by the CFPB and state attorneys general against Prehired signals a renewed commitment to protect students from deceptive practices in the realm of student loans. By holding Prehired accountable for its misleading marketing tactics and illicit debt collection methods, the authorities aim to safeguard the financial futures of countless aspiring learners. As the battle against deceptive student lending practices continues, it is crucial for students to stay informed, exercise caution, and seek reliable educational institutions and loan providers to achieve their academic and career goals without undue financial burdens.
