SL Finance: Student Loan "Forgiveness," Advance Fees and Unpaid Do Not Call Registry Fees

The bottom line: calling Registry numbers is one violation. So is calling without paying for Registry access.

Here is what happened

The FTC filed in the U.S. District Court for the Central District of California, alongside a parallel case against BCO Consulting Services Inc. and SLA Consulting Services Inc. The court entered temporary restraining orders in the two cases on May 2 and May 3, 2023. The FTC said the two schemes took approximately $12 million from students.

According to the FTC, since at least 2019 the SL Finance defendants:

• Lured borrowers, many of them low-income, into paying hundreds to thousands of dollars in illegal upfront fees.
• Led consumers to believe they were enrolled in a legitimate repayment program, that their loans would be forgiven in whole or in part, and that their payments would be applied to their loan balances. The defendants kept the payments.
• Claimed to be, or be affiliated with, the Department of Education and said they would take over servicing of the loans.
• Claimed their program was part of the CARES Act or a similar COVID-19 relief program, which the FTC charged under the COVID-19 Consumer Protection Act.
• Used deceptive tactics to obtain consumers' financial information, in violation of the Gramm-Leach-Bliley Act.
• Called consumers on the Registry and failed to pay required Registry fees, in violation of the Telemarketing Sales Rule (TSR).

Read the FTC's complaint against SL Finance.

The settlement

In October 2023, the FTC announced a stipulated order that:

1. Permanently bans the Castillo brothers and SL Finance from debt relief of any kind.
2. Bans misrepresentations about financial products or services and the use of false statements to collect financial information.
3. Imposes a $5.8 million judgment, largely suspended based on inability to pay, and requires surrender of assets worth approximately $312,685.

In July 2025, the FTC sent more than $356,900 in refunds to 7,150 consumers.

"These lawsuits to shut down student loan debt relief schemes continue the agency's crackdown on junk fees, unwanted calls, and financial exploitation," said Samuel Levine, then Director of the FTC's Bureau of Consumer Protection.

The law in plain English

The TSR prohibits charging a fee for debt relief services before the debt is actually renegotiated, settled or otherwise changed and the consumer has made at least one payment under the new terms. It prohibits misrepresenting an affiliation with a government entity. And it prohibits calling any number in an area code unless the seller has paid the annual fee for access to the Registry numbers in that area code.

What this means for you

1. Pay for Registry access for every area code you call, every year.
2. Scrub every list against the Registry before dialing.
3. Never collect debt relief fees in advance.
4. Never imply a connection to the Department of Education. Federal repayment plans are free through StudentAid.gov.