Feds Order Debt Relief Schemes To Cease Misleading Use Of Government Logos

Even though it’s incredibly easy to slap a government agency’s logo on your website, that doesn’t make it okay. Just ask the two debt relief companies that have been ordered to stop using Department of Education logos to mislead student loan borrowers.

In letters seen by Consumerist, lawyers for the Dept. of Education ordered two different debt relief operations to cease and desist using the agency’s name and image without authorization.

Both Atlanta-based Perfect Privacy LLC — operator of a debt relief business at SLprograms.org and other URLs — and San Diego’s The Student Loan Project run programs that promise relief — for a fee –to borrowers of federal student loans. They also both used official Education logos without permission, an apparent violation of the Lanham Act’s prohibition against false endorsement.

The letters warn both companies that they are under investigation for possible violation of a second federal law involving the misuse of government seals, which could result in fines and possible jail time.

In addition to unauthorized use of the Education name and logo, The Student Loan Project went further falsely implied a relationship with the government by using “.us” domain name for one of its sites (see image above), displaying the American flag on its webpage, and referencing the Department of Treasury when advertising its services.

The Dept. gave the companies until Feb. 4 to remove the improperly used seals and government references.

Acting Secretary of Education John B. King reminded students in a video post on Friday that the government and legitimate student loan servicers would never ask for fees in order to help manage debts.

“We’ve put these companies on notice that they may not misrepresent their relationship with the Department to trick students into paying for free services,” he said in the video.

Consumer advocates, including our colleagues at Consumers Union, applauded the DOE’s efforts on Friday, noting that millions of students are vulnerable to being “ripped off by shady debt relief companies.”

“[T]here’s no reason to pay for the kind of services being peddled by these companies when you can get assistance for free,” Suzanne Martindale, senior attorney for Consumers Union, said in a statement. “We’re encouraged that the Department is cracking down on these misleading marketing schemes and hope they will continue to aggressively enforce the law to stop debt relief scams.”

by Ashlee Kieler via Consumerist