Allege that Borrowers were induced to take on debt based on false promises about jobs and income, Company engaged in bait-and-switch tactics on “income-share” loans
Today Oregon Attorney General Ellen Rosenblum announced that Oregon is joining other states and the federal Consumer Financial Protection Bureau (CFPB) in suing a company called Prehired for deceptive marketing and debt collection practices.
Prehired, which operated a 12-week online training program claiming to prepare its students for entry-level positions as software sales development representatives with “six-figure salaries” and a “job guarantee,” drove interested applicants to sign an “income share” loan to finance the costs of the training program. They represented that the students who signed up would pay nothing until they got a high-income job through Prehired. In reality, the company deceptively buried terms that required participants to pay even if they never got a job and, in many cases, increased required minimum monthly payments without any evidence that they had secured employment or experienced an increase in income. Prehired originated over 1,000 “income-share” loans for students enrolled in its program around the country, including a number of student borrowers from Oregon who are collectively owed $59,491.28.
The suit seeks to void the loans and obtain redress for affected consumers and a penalty, which would be deposited into the CFPB’s victim relief fund.
“Taking advantage of students in this way is reprehensible and will not fly with me,” said AG Rosenblum, who has made student loan reform a top priority. “We will hold Prehired accountable and fight to make Oregon’s victims whole. And we will remain vigilant in our continued fight to protect consumers from all unethical and illegal operators.”
The Prehired multi-state lawsuit comes in the midst of a national conversation about outstanding education-related debt in the United States, which currently stands at an astonishing and unacceptable $1.7 trillion. AG Rosenblum is hosting her third national symposium on the student debt crisis next week, along with the Student Borrower Protection Center. The keynote speaker will be CFPB Director Rohit Chopra.
Under the Consumer Financial Protection Act (CFPA), the CFPB, state attorneys general, and state regulators have the authority to take enforcement action against institutions that violate federal consumer financial laws, including the CFPA’s prohibition of deceptive acts or practices and the Fair Debt Collection Practices Act. Oregon joins the states of Washington, Delaware, Minnesota, Illinois, Wisconsin, Massachusetts, North Carolina, South Carolina, and Virginia, and California’s Department of Financial Protection in this action.