The Federal Trade Commission has sent a warning letter to a company that markets financial aid prep assistance to post-secondary students, notifying the company that it could potentially be misleading consumers about access to a coronavirus relief program.
The letter to the operators of Frank Financial Aid (Frank) highlights the company’s claims that it gives students “everything you need” to apply for emergency grants available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and that there are four identified eligibility criteria for the emergency relief.
In fact, as the FTC’s letter notes, Frank’s purported assistance to students consists primarily of providing a form letter that may lack the information a student would need to apply for one of the grants from his or her school. The CARES Act program for students is administered by individual colleges and universities, and each has its own unique application process and grant eligibility criteria.
The FTC’s letter also warns Frank about offers of cash advances that can be paid back “when your financial aid comes in” and with “no interest, no fees – ever.” The letter notes that the company’s terms, however, appear to require the advance to be paid back within 61 days, whether or not the student has received any aid from his or her college or university by that time. Additionally, Frank charges a $19.90 monthly fee, according to the FTC’s letter.
The letter warns Frank to take prompt action to ensure all deceptive or unlawful claims are removed or corrected, and any other required disclosures are provided. The letter also instructs the company to notify the FTC by November 17 about the specific actions it has taken to address the agency’s concerns.