RICHMOND, Va. -- Prehired, a Delaware based company that allegedly offered students false promises of job placement while signing them up for loans, will have to provide more than $30 million in relief to borrowers.
Virginia Attorney General Jason Miyares announced an order from a federal court that requires Prehired to cease all operations, pay $4.2 million in redress to consumers impacted by the practices, and void all of its outstanding income share loans. The Consumer Financial Protection Bureau and 10 other states joined Attorney General Miyares in the lawsuit.
“The transition from college to the working world is challenging for our students. Prehired preyed on young people during this time of uncertainty and adjustment, setting them up for failure rather than success,” said Attorney General Miyares. “Today’s action rights Prehired’s wrongs and brings almost $100,000 worth of relief for affected Virginians.”
Prehired was a company based in Delaware that operated a 12-week online training program claiming to prepare students for entry-level positions as software sales development representatives with "sixfigure salaries" and a "job guarantee." To help finance the cost of the program the company would then offer income share loans to students.
Eleven states, including Virginia, and the Consumer Financial Protection Bureau filed a lawsuit in July to void the illegal loans and help address consumer impact.
- Deceived borrowers by claiming its loans were not loans
- Kept borrowers in the dark about key loan information
- Tricked consumers with deceptive debt collection practices
- Sued students in faraway locations
Under the court order the company will have to shut down permanently. Prehired will also have to pay $4.2 million to student borrowers who have made payments on their loans. Those with outstanding balances are voided and will not be sold or collected.
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