Class Action Settlement with Financing Company that offered Sham “Student Debt Relief” to Federal Student Loan Borrowers

This class action lawsuit challenged Equitable Acceptance Corporation (EAC) and its President Jeffrey Henn’s practice of financing sham “debt relief services,” including the false promise of student loan “forgiveness.”

The case claimed that EAC worked with more than 40 companies, called Dealers, to sell “debt relief services” to student loan borrowers. These companies did not tell the borrowers that all the services they provide are already available for free from the federal government. Instead, the companies charged borrowers about $1,300, told them they could pay with a “payment plan,” and sent borrowers to EAC, which gave them an entirely new loan in the form of a maxed-out line of credit—with sky-high 21% interest.

NYLAG worked with co-counsel Quinn Emanuel Urquhart & Sullivan, LLP to file this case on behalf of Vanessa Williams and Kory Turner, two student loan borrowers and a class of approximately 80,000 other borrowers who entered contracts with EAC. NYLAG and EAC have now reached a proposed settlement that will secure important benefits for the class. Under the settlement, EAC has agreed to stop collections, delete all credit reporting, and pay $1 million to fund damages to the class. Because EAC cannot collect any more money from Class Members and cannot sell any remaining balances to another company, thousands of borrowers across the country who were paying to EAC now do not have to choose between paying for essentials and paying EAC. This settlement is particularly favorable because EAC has almost run out of money, and it might be impossible to get any money from EAC later because EAC is winding down its business. The settlement does not affect class members’ obligation to pay their federal student loans. For more information about the case and terms of the settlement, please visit www.equitablesettlement.com.