Judge orders student loan company to stop business in Kentucky

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Hearing delayed for judge accused of misconduct

FRANKFORT, Ky. (WTVQ) – A Franklin Circuit Judge has ordered Florida-based Liberty Tax and Student Loan Defense to stop operating in Kentucky.

Attorney General Andy Beshear says the judge’s order prevents the company from soliciting or contacting residents about student loans, and from entering into contracts or attempting to collect payments from them.

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The Attorney General says Liberty Tax and Student Loan Defense failed to fully respond to a subpoena issued by Beshear’s Office of Consumer Protection. The Attorney General’s office has an ongoing investigation into the company’s potentially misleading college loan forgiveness claims aimed at Kentucky consumers for large fees.  In May, the AG filed its lawsuit in Franklin Circuit Court against the company. In this month’s ruling, the judge ordered the company to turn over all requested documents to Beshear’s office.

Part of the May lawsuit says Liberty falsely claims it is working with the federal government to offer debt relief services and has collected fees from Kentuckians without providing any debt relief services.

“Students should not agree to pay for services from these types of companies without first contacting their current federal loan servicer who in most cases can offer the same services at no cost,” Beshear said.