Student loan debt relief operator would be banned, fined, for allegedly absconding with $240,000 from borrower accounts

An operator of a California-based student loan debt relief firm would be banned from the industry after allegedly withdrawing more than $240,000 from student loan borrowers’ accounts without their authorization, the federal consumer financial protection agency said in an action filed Thursday.

According to the Consumer Financial Protection Bureau (CFPB), the operator, Frank Ronald 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 shuttered. The bureau termed the maneuver a “reboot.”

In a proposed settlement, the agency would ban Gebase from the debt-relief industry and order him to pay a penalty of $175,000.

More specifically, the bureau charges that Gebase harmed student loan borrowers by debiting borrowers’ bank accounts without authorization. “Gebase substantially assisted with withdrawing unauthorized funds from student borrowers’ bank accounts,” the CFPB said.

In addition to controlling the firm – Processingstudentloans – and facilitating the debits, the bureau alleged, Gebase was aware or should have known the debits were unauthorized and unlawful. “By April 2017, under this scheme, Gebase’s company had unlawfully debited more than $240,000 from hundreds of student borrowers’ accounts,” CFPB said.

The ban from the industry (if accepted by the court), according to CFPB, means Gebase will be permanently banned from offering or providing debt-relief products or services, financial advisory services, and other related products and services.

CFPB Seeks Ban Against Operator of Student Loan Debt Relief Scam Reboot