The CFPB has announced a proposed settlement with Student Financial Aid Services, Inc. (SFAS) to resolve charges that the company engaged in unlawful sales and billing practices in connection with offering fee-based financial aid assistance and preparation services to consumers.  The proposed Stipulated Final Judgment and Order provides for a judgment to be entered against SFAS in the amount of $14.5 million for the purpose of consumer redress.  However, due to the company’s financial condition, the amount the company must pay towards the judgment is limited to $5.2 million.  In addition, also due to the company’s financial condition, the order only imposes a $1 civil money penalty.

The complaint, filed in a California federal court, alleged that the financial aid assistance and preparation services provided by SFAS included assistance with preparing the federal government’s Free Application for Federal Student Aid (FAFSA).  According to the complaint, SFAS operated websites, including and, and related call centers, through which it offered FAFSA preparation services for a fee.  The CFPB alleged that when consumers provided credit card or bank account information to pay for FAFSA preparation services, SFAS began to bill them annually for FAFSA preparation services without accurately disclosing in understandable terms that they would be subject to automatic recurring annual charges for an unspecified number of years.  The CFPB claimed that SFAS (1) engaged in unfair and deceptive acts in practices in violation of the CFPA, (2) engaged in deceptive telemarketing in violation of the Telemarketing Sales Rule, and (3) violated Electronic Fund Transfer Act/Regulation E requirements for “preauthorized electronic fund transfers.”

In addition to the monetary provisions, the proposed Stipulated Final Judgment and Order includes a provision requiring SFAS to cancel and not reinitiate any recurring automatic charges except those for which SFAS has “a separate, express, written authorization from the consumer agreeing to the specific amounts and schedule of charges.”  The order also permanently enjoins SFAS from engaging in the alleged unlawful practices that were the subject of the complaint.

In its press release about the settlement, the CFPB stated that on July 13, 2015, SFAS announced its intention to transfer the website domain name “” to the U.S. Department of Education.  In June 2012, 20 State Attorneys General entered into a settlement with the owner of websites, including one with the name“,” that marketed educational institutions to military servicemembers and their families.  The settlement included a requirement for the website owner to relinquish ownership of the domain “” to the Department of Veterans Affairs.