Student loan borrowers already face enough stress without worrying about scams. Unfortunately, some fraudsters prey on that stress and exploit borrowers through false promises of loan forgiveness and lower monthly payments. The Federal Trade Commission (FTC) has once again stepped in to protect consumers. In a major legal action, the FTC has permanently banned a group of student loan fraudsters from the debt relief industry and is recovering millions in assets to right these wrongs.
This blog breaks down the details of the FTC’s case, what borrowers need to know about such scams, and how reputable credit repair companies like Credit Repair of Florida can help borrowers avoid falling victim to misleading offers.
The Scam Uncovered: What the FTC Found
The FTC’s lawsuit revealed that Panda Benefit Services (also operating as Prosperity Benefit Services), along with several other affiliated entities and individuals, had engaged in egregious misconduct. These operators:
- Pretended to be affiliated with the U.S. Department of Education.
- Promised guaranteed student loan forgiveness programs.
- Took over “servicing” of loans, misleading clients while diverting funds.
- Collected illegal upfront fees ranging from hundreds to thousands of dollars.
- Swindled over $16.7 million in illegal payments from distressed borrowers.
The scope of this scam was massive. Many consumers trusted these businesses with their personal financial information and payments, only to receive no legitimate help in return.
Legal Action: A Permanent Industry Ban
After an extensive investigation and multiple court rulings, the FTC achieved a major victory. On May 14, 2025, a stipulated order was entered against Select Student Services and Eduardo Martinez. Just days earlier, the court issued default judgments against Public Processing Services, Quick Start Services, and Signature Processing Services.
Notably, previous judgments had already been entered in October 2024 against Panda Benefit Services, Prosperity Loan Services, Pacific Quest Services, Clarity Support Services, and associated individuals including Emiliano Salinas, Melissa Salinas, and Christopher Hanson.
The final outcomes include:
- A permanent ban from the debt relief industry.
- A ban on telemarketing for several entities and individuals.
- Prohibitions against impersonating government agencies or using deceptive tactics.
- Court-ordered asset turnover and monetary judgments of up to $16.8 million.
These orders send a strong message: fraud in the debt relief sector will not be tolerated.
What This Means for Student Loan Borrowers
The FTC’s action provides relief and justice for those defrauded, but also serves as an important warning to others. Student loan scams often share common red flags, and recognizing them early is crucial.
Common scam tactics include:
- Promises of guaranteed student loan forgiveness.
- Claims of exclusive access to federal programs (especially those requiring a fee).
- Demands for upfront payments.
- High-pressure tactics to sign up immediately.
- Impersonation of government agencies.
Borrowers should be cautious, ask questions, and never pay for services that are available for free through the U.S. Department of Education or verified partners.
How to Get Legitimate Help with Student Loans
The FTC encourages borrowers to visit StudentAid.gov for free and official help with student loans. You can consolidate loans, apply for income-driven repayment plans, or even apply for forgiveness—all without paying a fee.
Still, many borrowers feel overwhelmed by the process. That’s where reputable credit repair services come in.
Why Credit Repair of Florida Is a Trusted Partner
At Credit Repair of Florida, we help consumers protect and restore their credit—especially after being misled by fraudulent services. Our team never charges for services that are available for free and always operates in full compliance with the Credit Repair Organizations Act (CROA).
Here’s how we help:
- Educate borrowers about their rights and real options.
- Review credit reports to spot inaccuracies or misleading account activity.
- Dispute errors and help remove misleading accounts opened by fraudsters.
- Guide you through rebuilding your credit after identity theft or financial loss.
Our clients receive transparent service and personalized guidance, not empty promises. We stand by ethical credit repair—nothing more, nothing less.
Final Thoughts: Stay Informed, Stay Protected
The FTC’s enforcement actions serve as both a victory and a warning. While justice has prevailed in this case, the fight against fraud continues. Borrowers should remain vigilant and remember:
- Never pay for student loan forgiveness.
- Verify the legitimacy of any company offering debt relief.
- Check with official sources like the Department of Education or the FTC.
If you suspect you’ve been targeted or want help recovering from damage done to your credit, Credit Repair of Florida is here to support you. We specialize in helping consumers regain control of their credit and take smart steps toward a financially secure future.
Need help restoring your credit after a student loan scam?
📞 Contact Credit Repair of Florida today for a consultation.