CSMS # 61247712 - GUIDANCE: Extension of Section 301 China Product Exclusions - U.S. Customs Protection
The purpose of this message is to provide guidance on the 14-day transition period extending 429 product specific exclusions (352 previously reinstated exclusions and 77 COVID-related) through June 14, 2024, and extending certain exclusions through May 31, 2025.
BACKGROUND
On May 30, 2024, United States Trade Representative (USTR) published Federal Register Notice (FRN) 89 FR 46948 to provide a 14-day transition period for exclusions listed in Annex A and B, extending them through June 14, 2024, and to further extend exclusions listed in Annex C through May 31, 2025.
The 429 product specific exclusions scheduled to expire on May 31, 2024, and extended through June 14, 2024, are listed in Annex A and B to FRN 89 FR 46948. Those exclusions receiving further extension are listed in Annex C to FRN 89 FR 46948 are extended through May 31, 2025.
Automated Commercial Environment (ACE) functionality for the acceptance of the current exclusions listed in Annex A and B is immediately available; functionality for the acceptance of Annex C exclusions will be available on June 13, 2024, as of 7 am eastern daylight time.
GUIDANCE
Instructions for importers, brokers, and filers on submitting entries to CBP containing granted exclusions by the USTR from the Section 301 measures are set out below, per FRN 89 FR 46948.
• Per Annex A, effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on June 1, 2024, and before 11:59 p.m. ET on June 14, 2024, the article description of heading 9903.88.67 and U.S. notes 20(ttt)(i-iv) of the HTSUS is modified by deleting “May 31, 2024,” and by inserting “June 14, 2024.”
o Importers shall not submit the corresponding Chapter 99 HTSUS classification for the Section 301 duties when HTSUS 9903.88.67 is submitted.
• Per Annex B, effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on June 1, 2024, and before 11:59 p.m. ET on June 14, 2024, the article description of heading 9903.88.68 and U.S. notes 20(uuu)(i-iv) of the HTSUS is modified by deleting “June 1, 2024,” and by inserting “June 15, 2024.”
o Importers shall not submit the corresponding Chapter 99 HTSUS classification for the Section 301 duties when HTSUS 9903.88.68 is submitted.
• Per Annex C, effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on June 15, 2024, and before 11:59 p.m. ET on May 31, 2025, the article description of heading 9903.88.69 and U.S. notes 20(vvv)(i-iv) of the HTSUS is inserted in numerical sequence by adding “9903.88.69.”
o Importers shall not submit the corresponding Chapter 99 HTSUS classification for the Section 301 duties when HTSUS 9903.88.69 is submitted.
ADDITIONAL INFORMATION
Imports which have been granted a product exclusion from the Section 301 measures and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146.
To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, importers may protest the liquidation if within the protest filing timeframe. The latest guidance on the process for submitting retroactive claims for product exclusions to CBP is found in CSMS 42566154.
Reminder: importers, brokers, and/or filers should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS when 98 or 99 HTS are required) for guidance when filing an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise.
For ease of reference, a summary of Section 301 duties and product exclusion notifications is attached.
Related messages: CSMS # 58869963, 55230568, 55229384, 53676546, 53676220, 54197079, 54468100, 51675127, 51741965, 51515097, 51469298, 50967853, 50980729, 51166038, 50834787, 50516041, 50264295, 50183808, 50019756, 49634975, 49268401, 49195492, 49165775, 49153305, 47830638, 47741425, 46607637, 46590066, 46561075, 45453497, 45318223, 44905878, 44451479, 44450418
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Vanillin From the People's Republic of China: Initiation of Countervailing Duty Investigation
• Certain Paper Plates From the Socialist Republic of Vietnam: Preliminary Affirmative Countervailing Duty Determination, Preliminary Affirmative Determination of Critical Circumstances, in Part, and Alignment of Final Determination With Antidumping Duty Determination
• Certain Paper Plates From the People's Republic of China: Preliminary Affirmative Countervailing Duty Determination, Preliminary Affirmative Determination of Critical Circumstances, in Part, and Alignment of Final Determination With Final Antidumping Duty Determination
• Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Advance Notification of Sunset Review
• Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review and Join Annual Inquiry Service List
• Sales at Less Than Fair Value; Determinations, Investigations, etc.: Vanillin From the People's Republic of China: Initiation of Less-Than-Fair-Value Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Antidumping Duty Order on Hydrofluorocarbon Blends From the People's Republic of China: Preliminary Negative Determination of Circumvention With Respect to R-410B From Mexico
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Bio-Layer Interferometers and Components Thereof; Notice of Commission Decision To Review in Part, and on Review To Affirm With Modification a Final Initial Determination Finding No Violation of Section 337; Termination of the Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Frozen Warmwater Shrimp From India: Final Results of Antidumping Duty Changed Circumstances Review
• Glycine From Japan: Preliminary Results and Rescission, in Part, of Antidumping Duty Administrative Review; 2022-2023
• Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From Cambodia, Malaysia, Thailand, and the Socialist Republic of Vietnam: Postponement of Preliminary Determinations in the Countervailing Duty Investigations
• Certain Cold-Drawn Mechanical Tubing of Carbon and Alloy Steel From India: Preliminary Results of Antidumping Duty Administrative Review; 2022-2023
• Raw Honey From the Socialist Republic of Vietnam: Preliminary Results of Antidumping Duty Administrative Review; 2021-2023
• Certain Pea Protein From the People's Republic of China: Final Affirmative Countervailing Duty Determination and Final Affirmative Critical Circumstances Determination
• Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review; and Final Determination of No Shipments; 2021-2022
• Glycine From India: Preliminary Results and Rescission, In Part, of Antidumping Duty Administrative Review; 2022-2023
• Prestressed Concrete Steel Wire Strand From Spain: Preliminary Results of Antidumping Duty Administrative Review; 2022-2023
• Raw Honey From Brazil: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review; 2021-2023
• Certain Alkyl Phosphate Esters From the People's Republic of China: Postponement of Preliminary Determination in the Countervailing Duty Investigation
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3 Packages worth over $10M intercepted by Louisville CBP - U.S. Customs & Border Protection
LOUISVILLE, Ky — In just 24 hours, U.S. Customs and Border Protection (CBP) Officers at the Port of Louisville seized three shipments containing a total of 2,387 pieces of jewelry including rings, bracelets, necklaces, and earrings bearing designer trademarks. The items were deemed to be inauthentic by CBP’s Centers of Excellence and Expertise, the agency’s trade experts, and if genuine, would have had a combined Manufacturer’s Suggested Retail Price (MSRP) of over $10.08 million.
On July 1, CBP seized the first shipment, which originated from China and was found to contain jewelry bearing the trademarks of famous luxury brands, including: 100 Van Cleef and Arpels necklaces, 23 Louis Vuitton necklaces, 37 Hermes necklaces, 66 Gucci necklaces, 30 Tous necklaces, 75 Dior necklaces, 8 Prada necklaces, 22 Versace necklaces, 46 Tiffany and Co necklaces, 15 Bvlgari necklaces, 9 Calvin Klein necklaces, 140 Van Cleef and Arpels bracelets, 184 Cartier bracelets, 129 Bvlgari bracelets, 47 Chanel bracelets, 53 Michael Kors bracelets, 14 Carolina Herrera bracelets, 26 Gucci bracelets, 13 Hermes bracelets, 21 Louis Vuitton bracelets, 2 Tory Burch bracelets, 3 Tous bracelets, 5 Tiffany and Co bracelets, 2 Rolex bracelets, 1 Yves Saint Laurent bracelet, 12 Louis Vuitton rings, 9 Chanel rings, 63 Cartier rings, 36 Versace rings, 18 Bvlgari rings, 79 Gucci rings, 104 Tous rings, 21 Daniel Wellington rings, 42 Calvin Klein rings, 14 Hermes rings, 4 Tiffany and Co rings, and 2 Rolex rings. The items were seized for infringing on the designer’s protected trademarks that had been recorded with CBP for border enforcement through the e-Recordation program. The shipment contained a total of 1,466 pieces of jewelry and was heading to a residence in Brooklyn, New York. Had the items been genuine, the MSRP for these products would have been over $5.13 million.
On July 2, CBP seized the second and third shipments, which also originated from China and were heading to separate residential addresses in Miami, Florida. When CBP officers inspected the first shipment, they found 78 bracelets, 42 necklaces and 42 pairs of earrings displaying the logos of Van Cleef and Arpels and Cartier. Inspection of the second shipment revealed 140 Cartier bracelets, 220 Van Cleef and Arpels bracelets, 150 Van Cleef and Arpels necklaces, 110 Van Cleef and Arpels rings, and 140 Van Cleef and Arpels pair of earrings- a total of 921 pieces our counterfeit jewelry. Had the items been genuine, the MSRP for these products would have been over $4.95 million.
All items were seized pursuant to CBP’s intellectual property enforcement authorities and were turned over to Homeland Security Investigations for further analysis. All three shipments were uninsured and imported under de minimis regulations, 19 U.S.C. 1321, commonly referred to as ‘Section 321’. The de minimis exemption allow CBP to pass free of duty and tax, merchandise imported by one person on one day that has an aggregate fair retail value in the country of shipments of $800 or less. In 2015, CBP processed 139 million de minimis transactions. By 2023, this has increased to more than 1 billion, representing a 662% growth in eight years. In FY 2024, nearly 4 million de minimis shipments arrive at CBP facilities for targeting, review, and potential physical examination each day. With the rise in e-commerce and small packages illegal actors are taking advantage of the unprecedented volume of e-commerce shipments entering the U.S. and the opacity of global supply chains to introduce illicit goods into the country. CBP estimates nearly 90 percent of the shipments coming into the United States are now entering as low value shipments claiming the de minimis exemption. This illustrates just how much growth has occurred in the e-commerce sector.
“These large seizures illustrate the work our officers do every day to protect our country, its citizens, and the economy,” said LaFonda D. Sutton-Burke, Director, Field Operations, Chicago Field Office. “Every day CBP officers are seizing these fraudulent de minimis shipments sent by bad actors. Criminals are trying to exploit the mail environment by peddling their counterfeit products. Even though this package had a low declared value, they pose the same potential health, safety, and economic security risks as larger and more traditional containerized shipments.”
The illicit trafficking of counterfeit goods offers criminals a complementary source of income and a way through which they can launder money. Additionally, monies received from the sale of counterfeit products can be channeled towards the further production of fake goods or other illicit activities. Additionally, counterfeiting is a hugely profitable business, with criminals relying on the continued high demand for cheap goods coupled with low production costs.
In FY23, CBP seized 19,522 shipments with intellectual property rights (IPR) violations for a total of nearly 23 million counterfeit items. If the seized products were genuine, their total MSRP would be valued at $2.4 billion. CBP protects citizens from unsafe and substandard products by seizing merchandise infringing on trademarks and copyrights recorded with CBP through the e-Recordation program https://iprr.cbp.gov/s/. CBP has established an educational initiative to raise consumer awareness about the consequences and dangers often associated with the purchase of counterfeit and pirated goods. Information about the Truth Behind Counterfeits public awareness campaign can be found https://www.cbp.gov/FakeGoodsRealDangers.
CBP encourages anyone with information about counterfeit merchandise illegally imported into the United States to submit an e-Allegation. The e-Allegation system provides a means for the public to anonymously report to CBP any suspected violations of trade laws or regulations related to the importation of goods in the U.S.
CBP’s border security mission is led at 328 ports of entry by CBP officers from the Office of Field Operations. Please visit CBP Ports of Entry to learn more about how CBP’s Office of Field Operations secures our nation’s borders. Learn more about CBP at www.CBP.gov.
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OTEXA: Announcements - Office of Textile & Apparel
• 07/03/2024 – April 2024 Textile and Apparel Import Report
• 07/02/2024 – A modification to the rule of origin under the United States - Korea Free Trade Agreement concerning certain woven fabrics of HTSUS heading 5408 to permit the use of non-originating cuprammonium rayon yarn will be effective August 1, 2024. For more information see 89 FR 54950.
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CBP Field Ops Nets Nearly 6 Pounds of Fentanyl in Detroit - US Customs & Border Protection
Drugs Intercepted Through Targeted International Mail Inspections
DETROIT – U.S. Customs and Border Protection’s (CBP) Office of Field Operations seized nearly six pounds of fentanyl at the Fort Street Cargo Facility in Detroit, June 2.
Officers were conducting inspections of inbound international mail when a K-9 alerted to the possible presence of the synthetic opioid. A physical inspection of the package revealed multiple plastic bags of pills, which were identified as fentanyl through subsequent testing.
The pills were seized, and the case remains under investigation by Homeland Security Investigations.
“I can tell you that the dangers of fentanyl cannot be overstated,” said Director of Field Operations Marty C. Raybon. “According to the CDC, in 2023, there were over 100,000 drug overdose deaths, with synthetic opioids like fentanyl being the main contributors. Given that just 2 milligrams can be a lethal dose, this amount had the potential to kill over 1.3 million people.”
The discovery is the largest of its kind for the Port of Detroit, and one of the largest inbound fentanyl seizures on the northern border within the last five years.
“One of CBP’s primary objectives is the prevention of dangerous narcotics such as fentanyl from entering the United States,” said Port Director Devin Chamberlain. “I’m proud of Detroit's Express Consignment Team for their diligent inspection that led to the successful interception of this deadly drug.”
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Norfolk CBP Cools Off Counterfeit Air Conditioners from China - U.S. Customs & Border Protection
NORFOLK, Va. – A shipment of air conditioners from China got a chilly reception in Norfolk, Va., after U.S. Customs and Border Protection seized them on Thursday for bearing counterfeit Energy Star certification marks. The air conditioners were valued at $95,000.
CBP officers initially examined the shipment of 305 window air conditioners destined for Arcadia, California on May 21. The air conditioners’ product packaging included the logo of Energy Star, a certification mark owned by the U.S. Environmental Protection Agency (EPA) that is only authorized to be applied to products that have been certified to meet strict energy-efficiency specifications set by the EPA.
Officers were unable to locate the models among the online listing of all energy efficient products certified by the EPA, located at, and detained the shipment for further review. CBP officers submitted product documentation and photographs to CBP’s trade experts at the Consumer Products and Mass Merchandising Center of Excellence and Expertise (CEE) for analysis.
On June 21, after consulting with the EPA, CBP’s trade experts verified that the air conditioners were unauthorized to bear the Energy Star name and design marks and that the marks were therefore counterfeit. Merchandise bearing counterfeit marks is subject to seizure and forfeiture pursuant to CBP’s statutory and regulatory authorities.
The Energy Star trademark is a trusted symbol indicating energy efficiency. Falsely implying that a product has been certified as energy efficient by the EPA could lead to unexpected increases in energy costs for consumers. Additionally, manufacturers who are willing to use fraudulent trademarks are also likely to cut corners on other product quality standards, which could lead to consumer safety threats such as refrigerant leaks, electrical hazards, or fire.
CBP officers seized the counterfeit air conditioners on Thursday.
“Unscrupulous manufacturers and vendors illegally profit on the sale of substandard counterfeit products at the expense and safety of American consumers,” said Mark Laria, CBP’s Area Port Director for the Area Port of Norfolk-Newport News, Va. “Customs and Border Protection urges consumers to protect their health and wallets by buying authentic consumer goods from reputable or authorized vendors.”
The international trade in counterfeit consumer goods is illegal. It steals revenues from trademark holders, steals tax revenues from the government, funds transnational criminal organizations, and the unregulated products potentially threaten the health and safety of American consumers. Counterfeit consumer goods may also be sourced or manufactured in facilities that employ forced labor.
CBP protects businesses and consumers every day through an aggressive Intellectual Property Rights (IPR) enforcement program. During fiscal year 2022, CBP officers and Homeland Security Investigations (HSI) special agents seized nearly 21,000 shipments containing goods that violated IPR, which equates to nearly 25 million counterfeit goods. The total estimated MSRP of the seized goods, had they been genuine, was over $2.98 billion (USD), or an average of over $8 million every day.
Media can search for additional enforcement details by viewing CBP’s IPR webpage or by viewing previous years’ annual counterfeit goods seizure reports.
U.S. trademark and copyright owners can register with CBP to have their intellectual property protected at the border through the through the e-Recordation program (https://iprr.cbp.gov/s/).
To report suspected counterfeits, visit CBP’s online e-Allegations portal or call 1-800-BE-ALERT. More information about counterfeit goods is available on CBP’s Truth Behind Counterfeits website and StopFakes.gov.
CBP's border security mission is led at our nation’s Ports of Entry by CBP officers and agriculture specialists from the Office of Field Operations. CBP screens international travelers and cargo and searches for illicit narcotics, unreported currency, weapons, counterfeit consumer goods, prohibited agriculture, invasive weeds and pests, and other illicit products that could potentially harm the American public, U.S. businesses, and our nation’s safety and economic vitality.
See what CBP accomplished during "A Typical Day" in 2022. Learn more at www.CBP.gov.
Follow the Director of CBP’s Baltimore Field Office on Twitter at @DFOBaltimore for breaking news, current events, human interest stories and photos, and CBP’s Office of Field Operations on Instagram at @cbpfieldops.
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National Health Care Fraud Enforcement Action Results in 193 Defendants Charged and Over $2.75 Billion in False Claims - Department of Justice
The Justice Department today announced the 2024 National Health Care Fraud Enforcement Action, which resulted in criminal charges against 193 defendants, including 76 doctors, nurse practitioners, and other licensed medical professionals in 32 federal districts across the United States, for their alleged participation in various health care fraud schemes involving approximately $2.75 billion in intended losses and $1.6 billion in actual losses.
In connection with the coordinated nationwide law enforcement action, and together with federal and state law enforcement partners, the government seized over $231 million in cash, luxury vehicles, gold, and other assets.
“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a health care company, if you profit from the unlawful distribution of controlled substances, you will be held accountable,” said Attorney General Merrick B. Garland. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”
“The extraordinary Special Agents of Homeland Security Investigations (HSI) were proud to play an integral role in this multi-agency investigation and national takedown of healthcare fraud,” said Secretary of Homeland Security Alejandro N. Mayorkas. “Through this action, we in federal law enforcement send a clear and strong message—that we will hold accountable those health care providers and prescribers who prey on their patients for profit and disregard the first rule of medical care: do no harm.”
“Healthcare fraud victimizes patients, endangers the health of vulnerable people, and plunders healthcare programs,” said FBI Director Christopher Wray. “This wide-ranging collaboration demonstrates the FBI’s commitment to rooting out predatory healthcare fraud, protecting patients, and ensuring critical healthcare funds go where they are needed most.”
The charges alleged include over $900 million fraud scheme committed in connection with amniotic wound grafts; the unlawful distribution of millions of pills of Adderall and other stimulants by five defendants associated with a digital technology company; an over $90 million fraud committed by corporate executives distributing adulterated and misbranded HIV medication; over $146 million in fraudulent addiction treatment schemes; over $1.1 billion in telemedicine and laboratory fraud; and over $450 million in other health care fraud and opioid schemes.
“Health care fraud affects every American,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “It siphons off hard-earned tax dollars meant to provide care for the vulnerable and disabled. In doing so, it also raises the cost of care for all patients. Even worse, as the prosecutions we announce today underscore, health care fraud can harm patients and fuel addiction. The Criminal Division is committed to rooting out health care fraud, wherever it may be found, no matter who commits it. And we are using more tools than ever before to uncover misconduct and hold wrongdoers to account, whether they are executives in corner offices or doctors who violate their oaths.”
Today’s enforcement action was led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section and its core partners: U.S. Attorneys’ Offices, the Department of Health and Human Services Office of Inspector General (HHS-OIG), FBI, and Drug Enforcement Administration (DEA). The cases were investigated by agents from the division’s core partner agencies along with other federal and state law enforcement agencies. The cases are being prosecuted by Health Care Fraud Strike Force teams from the Criminal Division’s Fraud Section, 32 U.S. Attorneys’ Offices nationwide, and 11 State Attorney Generals’ Offices.
“This work is important to the Department of Health and Human Services (HHS) and the millions of Americans we serve. HHS vigorously pursues anyone who commits fraud against our health care programs. But it takes all of us, working together, to be successful,” said HHS Deputy Secretary Andrea Palm. “Those who steal from these programs are stealing from the American families who rely on them and putting patients at risk. We won’t stop until all those who try to defraud the federal government are caught and held accountable.”
“We will not tolerate fraud that preys on patients who need and deserve high quality health care,” said the HHS-OIG Inspector General Christi A. Grimm. “The hard work of the HHS-OIG team and our outstanding law enforcement partners makes today’s action possible. We must protect taxpayer dollars and keep Americans safe from harms to their health, privacy, and financial well-being.”
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FTC Acts to Stop Student Loan Debt Relief Scheme that Took Millions from Consumers in First Case under the Impersonation Rule - Federal Trade Commission
Agency says scammers pretended to be affiliated with the Department of Education to collect illegal junk fees for fake student loan debt relief
In its first case under the Impersonation Rule, the Federal Trade Commission has stopped a student loan debt relief scheme that bilked more than $20.3 million from consumers seeking debt relief by pretending to be affiliated with the Department of Education.
A federal court temporarily halted the scheme and froze its assets- at the request of the FTC, which seeks to end the defendants’ deceptive practices. The FTC charged that the company also falsely claimed that they would take over consumers’ student loans to get them loan forgiveness that did not exist.
“These defendants promised to lower student loan payments, but then took millions of dollars from consumers and did nothing, leaving them in deeper debt,” said Samuel Levine, Director of FTC’s Bureau of Consumer Protection. “The FTC will continue taking decisive action against those who exploit Americans struggling with student debt.”
According to the FTC’s complaint, since at least June 2021, California-based Panda Benefit Services (also doing business as Prosperity Benefit Services), Clarity Support Services, Pacific Quest Services, Prosperity Loan Services, Public Processing Services, Quick Start Services, Select Student Services, Signature Processing Services, and its operators Christopher Hanson, Eduardo Martinez, Emiliano Salinas, and Melissa Salinas, preyed on consumers burdened with student loan debt and tricked them into paying hundreds to thousands of dollars in illegal junk fees towards loan forgiveness that did not exist.
The FTC says that Prosperity Benefit Services, its affiliated companies, and operators falsely claimed that consumers who paid for their program were guaranteed to receive loan forgiveness and that the program would significantly reduce their loan payments. The operators also falsely claimed to take over the servicing of consumers’ student loans and told consumers that they were affiliated with the Department of Education.
The complaint notes that in many instances, the operators would send mailers with urgent language like “FINAL NOTICE” and “Time Sensitive,” and boasted benefits like “complete loan forgiveness” and “tax free loan forgiveness” to entice consumers to call them and speak to a telemarketer. When consumers called the number on the mailers, they would speak with telemarketers who then convinced them that if they signed up for the debt relief program, they would be eligible for loan forgiveness after only a few months or years, a substantially shorter time than what is available under federal government repayment programs. Many consumers have reported that after signing up and making payments, they never received loan forgiveness and that the scheme’s operators never applied for loan forgiveness on their behalf.
In addition, the operators of the scheme falsely claimed that they would take over consumers’ loans and claimed that they buy their loans from consumers’ federal servicers. By falsely claiming they worked with or were affiliated with the Department of Education, the scheme’s operators were able to obtain consumers’ bank account or debit card information, and typically collect hundreds of dollars in illegal upfront fees from consumers, according to the FTC.
Contrary to their promises, in many instances the operators did not obtain loan forgiveness or lower payments for consumers, and because borrowers of federal student loans were not required to make payments on their loans between March 2020 and October 2023 due to the federal COVID-19 payment pause, many consumers have often gone months or years before finding out that their student loan payments were not lowered and that their loans had not been forgiven.
The Impersonation Rule, which went into effect April 1, gives the agency stronger tools to combat and deter scammers who impersonate government agencies, such as the Department of Education, and businesses, enabling the FTC to file federal court cases seeking to get money back to injured consumers and civil penalties against rule violators. In addition to the Impersonation Rule, the agency says the defendants also violated the FTC Act, the Telemarketing Sales Rule, and the Gramm-Leach-Bliley Act.
The Commission vote authorizing the staff to file the complaint was 5-0. The U.S. District Court for the Central District of California entered a temporary restraining order on June 24, 2024.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.