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CFPB Seeks Ban Against Operator of Student Loan Debt Relief Scam Reboot

More than $240,000 disappeared from student loan borrowers’ bank accounts when Frank Gebase, Jr.’s company facilitated a series of unauthorized charges

Washington, D.C. – Today the Consumer Financial Protection Bureau (CFPB) took action against the owner of a student-loan debt relief company for allegedly withdrawing hundreds of thousands of dollars from student borrowers’ bank accounts, without authorization. The CFPB alleges that Frank Gebase, Jr. controlled a company that took the borrowers’ money after obtaining their names and account information from a previous student-loan debt-relief scammer that the CFPB shut down. The CFPB’s proposed settlement, if entered by the court, would ban Gebase from the debt-relief industry and order him to pay a penalty.

“Frank Gebase brazenly rebooted a student debt-relief scam the CFPB shut down over six years ago,” said CFPB Director Rohit Chopra. “When student loan servicers don’t provide clear and accurate information to borrowers, it sets the stage for scammers to swoop in.”

On March 30, 2016, the CFPB ordered Student Aid Institute to shut down its debt-relief operations and rescind all of its consumer agreements. That order resolved the CFPB’s findings that Student Aid Institute violated federal consumer financial protection law, including by charging unlawful upfront fees for student loan debt-relief services and making false promises to borrowers about possible savings through reduced payments and loan forgiveness. Gebase had leased office space to Student Aid Institute, and he was a longtime associate of its principal. In 2016, just prior to the CFPB’s order against Student Aid Institute, Gebase founded Processingstudentloans in San Diego, California. Gebase was the founder, sole owner, CEO, and sole corporate officer of Processingstudentloans.

The CFPB alleges that from approximately May 20, 2016 to April 5, 2017, Processingstudentloans was a non-bank provider of student-loan debt-relief services, including recertifying U.S. Department of Education federal student-loan repayment programs on behalf of borrowers. Processingstudentloans did not solicit new customers. Instead, the CFPB alleges that it obtained student-loan account and billing information for hundreds of borrowers, who were formerly customers of Student Aid Institute, without their knowledge or consent. Processingstudentloans did not enter into any contracts or agreements with the borrowers. As alleged in the complaint, without authorization, Processingstudentloans collected recurring fees from customers, typically $39 per month, stealing hundreds of thousands of dollars in total fees from hundreds of student loan borrowers.

In March 2017, Processingstudentloans stopped collecting fees from borrowers, and on April 5, 2017, Gebase closed Processingstudentloans.

The CFPB alleges that Gebase harmed student loan borrowers by debiting borrowers’ bank accounts without authorization. Gebase substantially assisted with withdrawing unauthorized funds from student borrowers’ bank accounts. In addition to controlling Processingstudentloans and facilitating the debits, Gebase was aware or should have known the debits were unauthorized and unlawful. By April 2017, under this scheme, Gebase’s company had unlawfully debited more than $240,000 from hundreds of student borrowers’ accounts.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions and individuals violating consumer financial protection laws, including engaging in unfair, deceptive, or abusive acts or practices. The proposed settlement, if entered by the court, would require Gebase to:

  • Pay a $175,000 fine: Gebase will pay the $175,000 penalty to the CFPB, and the CFPB will deposit it into the CFPB’s victims relief fund.
  • Stop participating in debt-relief and other activities: Gebase will be permanently banned from offering or providing debt-relief products or services, financial advisory services, and other related products and services, as described in the proposed stipulated final judgment and order.

Read today’s complaint and proposed stipulated final judgment and order.

The CFPB’s victims relief fund is used to compensate eligible harmed consumers. The CFPB will work to provide full relief from the victims relief fund to eligible harmed consumers.

For borrowers preparing for college, attending school, or already repaying student loans, the CFPB has the tools and resources to help them make important loan decisions.

Consumers can submit student loan servicing or debt-relief servicing complaints, or complaints about other financial products or services, by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).


The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.