Past due on loan payments
Sean Emerson avoided losing any money to AFBC, though his involvement with the company still caused him significant trouble.
In December 2013, Emerson received a flyer in the mail from AFBC, and he signed up with the company a month later after it told him it could help him lower his student loan payments under a program called Income Based Repayment. Emerson said he did not realize he could apply for the program on his own, without AFBC’s help.
“When I received the AFBC mailer, my gut told me to be skeptical of the offer. I wish that I had listened to it. But, when you are in need, you are more vulnerable,” Emerson wrote in a customer declaration for the FTC.
Several months later, Emerson received a notice from his loan servicer that he was 60 days past due on his monthly payment, negatively affecting his credit score. Emerson immediately called AFBC and, after an extended argument with a sales representative, ended up on the phone with Frere himself.
“He seemed like a snake oil salesman, I guess,” Emerson said in an interview. “I didn’t like the feel I got talking to him. He was trying to be really syrupy and overly concerned and assure me that everything was going to be taken care of, that they would take care of the credit, which they did not.”
Emerson later learned AFBC never had withdrawn money from his bank account, so he didn’t directly lose any money to the company. But the negative credit report followed him and he said it took about 100 calls to his loan servicer to get the negative report removed from his credit history.
Loans placed in forbearance
None of Frere’s other eight customers that gave declarations to the FTC were harmed as much as Vildasol.
After Vildasol signed the documents provided by AFBC, the company began withdrawing money monthly, nearly $2,500 over a year and a half. He eventually realized none of it was going toward repaying his student loan.
Vildasol, now living in Albuquerque, New Mexico, is unemployed following a car wreck that left him unable to work — and college loan debt $5,000 more than the $70,000 he owed when he called AFBC nearly five years ago.
“You figure you miss the payments for a year and a half, plus interest. That turned into quite a few thousand that I lost,” he said in an interview.
Vildasol began receiving deliquency notices from FedLoan, the student loan servicer in charge of collecting his payments. He repeatedly contacted AFBC, and the company repeatedly assured him everything was fine.
Finally, in mid-2015, Vildasol called FedLoan. He learned his loans had been placed into forbearance, temporarily suspending his payments, and no payments had been made since he signed up with AFBC the year before. Adding insult to injury, AFBC had convinced Vildasol to unintentionally break the law by inflating his family size, he said. Vildasol had reported a family size of 11 by counting all of his adult children and grandchildren, none of whom lived at his home full time.
“They said, ‘No, you can’t do that, that’s illegal.’ … The first lady I spoke with over at FedLoan was not very nice. I said I don’t defraud anybody, I’m an honest citizen, I consider myself a patriot,” Vildasol said.