Information about Settlement with Equitable Acceptance Corporation

On September 20, 2018, the New York State Attorney General filed a lawsuit against several student loan debt relief companies, their financing company, and two individuals who were in charge of several of the companies. The lawsuit alleges that these companies and individuals fraudulently, deceptively and illegally advertise, market, offer to sell, sell, and finance student debt relief services to thousands of consumers nationwide, including New Yorkers. The defendants promise to help borrowers apply for various programs offered by the United States Department of Education (“DOE”) with respect to the borrowers’ federal student loans, which borrowers can do themselves for free. The defendants typically charge consumers more than $1,000 for their services and in most cases require that the consumers pay these large fees by entering into a financing agreement to take out a loan from the financing company defendant, Equitable Acceptance Corporation (“Equitable”).

The other named entity defendants are: Debt Resolve, Inc.; Hutton Ventures, LLC; Progress Advocates, LLC; Progress Advocates Group, LLC; Student Advocates, LLC; Student Advocates Group, LLC; Student Advocates Team, LLC; Student Loan Care, LLC; and Student Loan Support LLC.

On August 12, 2019, the Court approved a Consent Order and Judgment (‘Consent Order”) agreed to by Equitable and the New York State Attorney General. This Consent Order ended the lawsuit against Equitable. The lawsuit against the other defendants continues.

Under the Consent Order, you may have received a notice in the mail from Equitable in September 2019. Please see below for answers to some frequently asked questions.

  1. Who is Equitable?

    Answer:

    Equitable is a company that provides financing (i.e., loans) for the purchase of student loan debt relief services purchased from other companies. In other words, Equitable loaned you money so that you could pay another company to provide you with debt relief services. You may have seen Equitable’s name on your bank statement, taking money out of your account each month to pay back the loan you had with them.

    Equitable is not affiliated with the DOE and is not your student loan servicer. The payments to Equitable did not pay your student loans.

  2. What are the terms of the Equitable Consent Order?

    Answer:

    Some of the major terms are:
    • Equitable is permanently banned from offering or providing loans or financing for any debt relief services to New York consumers, including student debt relief services.
    • As of August 12, 2019, Equitable stopped collecting all debts from New York consumers arising from the purchase of student loan debt relief services in New York. Equitable also cannot sell or assign those debts to anyone else for collection.
    • For relevant New York consumers, Equitable must also take steps to delete the debt from consumers’ credit reports.
    • Equitable must pay New York State $225,000. The Consent Order provides for a $1.66 million judgment, but that judgment was suspended based on the company’s inability to pay.
    • I got a letter in the mail with a notice that says “Notice of Equitable Acceptance Corporation’s Settlement with the New York Attorney General’s Office.” Is this letter real?

      Answer:

      Yes. Equitable was required to send you the letter as part of the Consent Order.

    • The letter says I don’t owe Equitable any more money. Is this true?

      Answer:

      Yes. Under the Consent Order, Equitable will “forbear” or will no longer collect any amounts you would have owed under your contract after August 12, 2019. The money you owed to Equitable is different than the amounts you pay to your servicer for your student loans. You still must make payments on your student loans.

    • I don’t understand the part of the notice where it says I may need to recertify – how do I know whether I have to and what do I have to do?

      Answer:

      It is very important that you find out whether this section applies to you. Whether you need to recertify depends on what type of repayment plan you are currently in. You only need to recertify if you are currently in an income-driven plan. These plans may commonly be referred to as PAYE, REPAYE or IBR.

      If you need to recertify, you need to recertify every year. The month of your recertification is tied to the date you entered the plan. You must timely recertify your eligibility – otherwise your monthly payments will likely go up.

      Helpful sources of more information about student loans:

    • Will I get money back from Equitable? If so, when?

      Answer:

      The Consent Order applies only to New York consumers.

      If you received a notice in the mail from Equitable about the settlement with the New York Attorney General’s Office you may be eligible for restitution from Equitable’s $225,000 payment to New York State. You do not need to do anything in order to be eligible for or claim this restitution. The dates by which checks will be mailed is not yet known.

    • Does the Consent Order mean I don’t have to pay my student loan?

      Answer:

      No, you still have to pay your student loan. The Consent Order concerns money you owed Equitable for the debt relief services you purchased from a debt relief services company, not your actual student loan.