Mickelle and I received an envelope yesterday with a supposed $300 Mastercard gift card with the following "verbatim" explanation:
Dear John,
Congratulations, FFELP would like to reward you with a MasterCard Gift Card. There is NO COST TO YOU. This is our way of showing our appreciation for your testimonial regarding your experience with our free service. You will be able to user your Gift Card at gas stations, restaurants, supermarkets, or anywhere that Master Card is accepted.
Sincerely,
The marketing Dept. of
Federal Family Education Loan Processing Corp.
NOTE:
Activation is Required!
And that's what it said, telling me to "call for details" to 1-866-901-8558. I called them today and they told me that I have to consolidate my student loans with them in order to receive the card. While the letter makes it seem like the card is mine, as soon as I told the chap on the phone that I had already consolidated, he couldn't wait to get rid of me. When I asked him if he thought it was deceptive what they were doing, he started to agree with me, and then said no. Especially during the Christmas season, $300 would be an awesome thing to receive. Make no mistake, this $300 will come out of your pocket in your loan.
Boys and girls, there's not such thing as free $300 when it comes to a company. Especially one that sends you offers unsolicited through the mail.
May this post be a public service announcement!
FFELPC: Morran-se num fogo.
FFELP= Federal Family Education Loan Program, which has nothing to do with these shysters. The refer to themselves as FFELP, claiming de facto, to be part of the government program.
Federal Family Education Loan Processing Corp.
P.O. Box 1198
Tarpon Springs, FL 34655
Update December 11, 2007
This has become my most popular post. I reported the company to the Better Business Bureau in Florida. The FFELPC responded to my complaint with a terse letter attempting to excuse their behavior and question my intellect. I responded that their name would be like me being a private investigator and calling my company the Federal Bureau of Investigation Corporation. It gives the appearance of government sanctioning, when in fact, it is a for-profit enterprise. I also reported the company to Visa for trademark infringement, no word yet on what happened there. Regardless of the legality of what they do, it is still shady. They send you a fake card for $300 for your testimonial for their free service. It isn't free. They make money off your student loan interest--nothing is free. I recommend http://www.northstar.org/ for all your student loan needs. They are a not-for-profit lender, and they have some of the best interest rebates around!
Shameless plug: If you found this post helpful/useful, please consider clicking on a couple of the google ad links to the right so I can earn some ad money to help pay off my student loans.
Update December 29, 2007
Apparently the FFELPC has tried to update its gimmick. Jedi Jawa has a good link explaining their new shade of gray. Apparently they now at least let you know that you have to take advantage of their service to get the $300, but it's still misleading, in my opinion. Thanks to the diminuitive Jedi for the link! I also found the letter the FFELPC sent to the Florida BBB in response to my complaint:
Federal Family Education Loan Processing Corp.
40347 US. Hwy. 19 N. Suite 233
Tarpon Springs, FL. 34689
December 15, 2006
Better Business Bureau of West Florida, Inc.
P.O. Box 7950
Clearwater, FL 33758
RE: Case # 67074579: Mac Williams
Enclosed in this communication is a response to the compliant filed with you by the above referenced party.
Our organization is a participant in the Federal Family Education Loan Program which was developed by the Higher Education Act. This is a free service that has no cost to any potential borrower that we contact. The federal program has no fees or costs of any kind and is available to anyone who has eligible loans to consolidate through the program. We have been granted access to borrower information through our lenders who had to conform with the practices and compliances with the Department of Education.
What we offer is an incentive for eligible loan holders to consolidate those loans with us.
We do not pretend to be or inform anyone that we are the Federal Govt. What we say is that we participate in a federal program designed for federal student loan holders.
Again, I say that calling oneself the FFELPC is like me owning a waste disposal company called the Environmental Protection Agency Corporation. It is them dealing in shades of gray.
The amount of our incentive in no way is added to the loans or is required to be repaid.
Certainly, but other companies offer incentives to the borrower that will save them thousands upon thousands of dollars (in addition to lower interst rates). Your $300 offer, in essence, costs them money.
In fact our letter has an OPT OUT notice on the reverse side which states that the offer is not guaranteed if our requirements are not meet. And that a testimonial is required.
This Opt Out notice has been approved by a leading credit reporting agency.
We notice that the entire letter was not submitted to you with that information.
I transcribed the entire letter into my original post. To my recollection, there was NO opt-out notice on the back of the letter--but it has been a year.
Please understand that no company can please everyone although we do an outstanding job with customer service there will always be those who feel they can buck the system by complaining or misrepresenting the facts. For every one (1) person that complains we have hundreds that are happy with our service and we have the testimonials to prove it.
And then there are the thousands who receive your offer, recognize its shadiness, and neither accept the offer nor complain.
Thank you for allowing our company to respond to this compliant and we will do everything in our power to rectify any situation that may result in a negative experience with anyone that comes in contact with our organization customers or not.
Sincerely,
Ronald Perret
President
Federal Family Education Loan Processing Corp.
RPerret@myffelp.com
Notice the P stands for Processing and not Program. Nowhere on the letters does it spell out what the P represents in the acronym. No matter, they've now changed their name.
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49 comments:
Thanks for posting this! I too got this letter, however I didn't get it until after they were closed on Friday so I didn't get to talk to anyone.
Thanks again!
Thank you. I was sent the same card and offer. I was just about to give my approval, but I saw no loan disclosure and got suspicious.
What still concerns me is that they were able to access all of my loan information. Do you know where they obtained this data?
I just got the same scam in the mail just now. I was tipped off because the card is obviously fake. IANAL, but I am fairly certain this is a clear case of fraud, deception, or false advertising, etc. I've gotten scamming credit card and loan consolidation offers in the past, but this is the worst. I'm going to make an evil phone call to them and record it. Then I'm going to put the recording on our podcast. This is going to be awesome.
Thanks. I just got one of these as well. I thought it was a scam, but now I know for sure. You saved me a wasted phone call.
Thanks for the info. I, too, got this card and wondered about the validity of it. Now I don't have to waste my time!
I've gotten this card three times. I keep throwing them away but they keep coming. I am a lawyer and very suspicious of things like this, but even I wasn't sure at first. This was very well done and I could see how people could fall for it. Thanks for posting, it was helpful to set my mind at ease.
Thank you so much for your article, I recieved this letter too and tried calling FFELP from a number I looked up online and they had no idea what I was talking about. That was the first hint something was up. So I hung up and typed the actual name of the company not FFELP into a search engine and found this article. Thank you again!!!
Got this one today, boggles my mind that companies think they can get away with this, especially because $300 is big money when your a week out of finishing school and on the job hunt. I think a nice phone call to the FTC is in order. At any rate, thank you for posting this and allowing me the freedom to not waste my time calling (well, i did call once and got a busy signal, that was my big clue). Thanks again!
Thank you! I always double check the internet for stuff that looks too good to be true. You were the only hit I got on Google. Thanks!
Thanks a bunch...I just got this letter today and felt it was too good to be true and I too went on google to "investigate" and got this article. Thank you!!!
I'm so glad that this site is up. I just want everyone to know that this is one big giantic scam!!! The gift card is what gave this away. The back of the "gift" card was completely different than the other cards I have seen!!! Ordinary cards have some links to them. This one didn't. Also, there was no security code on the back of the card. Also, the letter didn't have any names on it. That was a dead give away. I go to ITT Technical Institute in Bessemer, AL. I have learned a lot about this while obtaining my degree in Information Systems Security.
Wow, thanks for shedding some light on these turds. I was a little excited when I first got it until I began to investigate these flim flam sheisters
These folks really helped me. It is common sense to know that consolidation is free and only helps lower payments. I was told that I did not have to consolidate but that if I gave a testimonial regardng thier services they would pay me for advertising, what's wrong with that?
I would not judge them as they have helped tons of borrowers. Oh and NO it did not get tacked on to my loan.
I called, will ask you 6 questions to use in future mailings. BS...
1st question are you in school
2 - can't use until out of school.
3 - have to check with Dept. of Education to verify.
Bunch of scum bags
Grateful,
I also recieved this notice in the mail and called the company. I was glad to here of the possiblility of getting $300 bucks right now and for FREE! Nothings is free...I wondered where they got my name and info. When they asked me for my social and authorization to my load information is sounded shadey...I hesitate and the three way call got pressure and the representative demanding... Did do it and hung up on them.
Thanks a bunch!!!
10/24/2007
Thanks for the information. I as well received a Gift Card from Visa Gift Card/Visa Debit with the exact writing on the letter. I thought there was something fishy about it. Thanks again!!!
An interesting tidbit of information is on the back of the gift card offer it says, "The providing of a gift card or bank check is contingent upon the completion of testimonial resulting from your experience with our federal student loan services, not the consolidation." I wonder if one could complete the testimonial but not consolidate and force them to pay up...
Thanks for sharing the information! I imagined this had to be false, but the disturbing thing is I got this a month AFTER I called and opted out of prescreened offers.
Another googler, thanks for thei nfo
Thank you so much for the information. My husband received one of the letters too. We were just about to call on it when I came up on your post. You saved us a lot of trouble. We appreciate it that very much.
Thanks! You're helping us all. I figured it was too good to be true. Good thing I checked online first. btw, the debit card says "mock" on the back and has no VISA logo anywhere.
Ha ha. I was told that they would be sending me another one when I graduate next year. You are providing a great service; Thanks.
I, too, noticed the word "Mock" on the back of the card with no identifying company name, contact number or anything. The words " the completion of testimonial resulting from your experience with our federal student loan services, not the consolidation" was a big red flag because I didnt use any service and so how could I give a testimonial? I hope that the one response who thought they helped out did NOT give their social security number or other identifiers over the phone. This is obviously a scam. Thanks for the blog. I didn't have a company name but googled the phone number and came upon your posts.
No way! You noticed that too!
Thanks you guys for the posting. I just received a "Visa Gift Card" for $300 right around Thanksgiving asking that I call their number to activate the card. This is false advertising at its worse, especially aimed at students for whom $300 is a substantial amount. The word "mock" on the back of the card and the fact that I never filled out any testimonial for a Federal Family Education Loan Processing Corp tipped me off. It is disgusting how they use their logo FFELP to trick students into thinking that they are a part of the Federal Family Education Loan Program or USA funds. I googled the their name and found this blog which has been extremely helpful.
me too!!! Bastards!
Why are so many people mad at this company? If they can help lower payments, or help defer the payments till you are able to pay why be upset. They give you 300 if you do the testimonial and costs nothing! They don't "sell" anyones info or use peoples social security numbers for anything shady. Sounds like most of the people on this thing follow along with whatever someone says without really checking things out by asking the right questions.
Thank you for posting this info on the Web. $300 is just a little too good to be true (and the smarmy SOBs sent this to me and many others very, very close to the holiday season). Ted Kennedy is investigating these bogus loan groups. It turns out that so many of our "great" colleges and universities are providing our personal info to these assholes in exchange for actual "gifts." Google "Larry Burt" or Mr. Kennedy and you will find a pdf that Kennedy wrote, in which he provides actual e-mail messages from these bogus and not-so-bogus pricks to our financial aid offices.
I just got one of these cards as well- my card actually has my name and a card number on it. It looks like the Visa gift cards I can buy at my bank- except that the back is almost blank with the 1-800 number on it. I get "official notices" from them several times a week. I think it is shameful that a company would take advantage of students, who, like myself, are fresh out of school and broke. I hope they get sued.
Wow, it's a year from the initial comment, and I just got my letter/card in the mail. The word "mock" was definitely a tip off, but not having the word Visa anywhere on the card sealed the deal. We all need to write the Better Business Bureau and the attorny general about this. $300 is too good to be true!
I too am amazed at this "scam" going around a year later. I was intrigued and had googled FFELP and saw that it was a government thing and thought that this was a true gift, a needed gift especially this time of year. But as it has already been said nothing is FREE. Thanks for having this posted.
Thanks for your post, I can't believe that there is no trademark infringement or false advertising problems with this scam. Mine came with the old visa colors but instead of the word VISA is said DEBIT there.
I too receive this "amazing offer" and if it is too good to be true then it is. I appreciate the information and I will click on a link for your time.
Sincerely,
A happy person who avoided be taken advantage of : )
I noticed that there are a few apparent changes to their "pitch." I imagine that they changed their letter/card just enough to keep this thing barely legal.
As far as the post that says this outfit helped you--did you shop for your interest rates? This is the most blatantly misleading consolidation ad I've recieved, and that is saying something. Federal loan rates are fixed by law, but I recently consolidated my private loans at 7.25% with zero fees. Did these guys beat that?
Also keep in mind that when the bankrupcy laws were changed last year, they made it so you cannot have student loan debt forgiven--which means that no matter what happens, these loans will never be forgiven. Rich territory for shady lenders and bottom feeders.
Like everyone else, I received the card earlier this month, and finally took the time to look into it now and came across your blog. I was suspicious as to the validity of the card, but I was also confused because I had just filled out a Federal Family Education Loan Program consolidation application just weeks before I received the card, so it seemed almost legitimate. Thanks for saving me a lot of time in trying to figure out what the card was all about!!
I have to greatly disagree with all of this. I called the company and they were very nice and explained everything to me. I had such a great experience with FFELPC that my husband and daughter consolidated their student loans thru them also. All together we saved over $70,000 by consolidating. I also did some research about the % rate and they gave me the same that everyone else said they could give me. I also found out that processing centers do not make any money off the interest of the loans, the lender and servicers do. I would highly recommend this company to everyone and any one that has student loans.
this website and the comments from most are a shame. this company provided me a great service on the consolidation of my loans. it is quite upsetting to read all this misinformation when a company such as this does such a fine job in helping people.
A reporter at U.S. News and World Report linked to my blog on this subject for a story. Check out ho the loan companies are tripping over themselves to defend their practices.
Evidently people don't understand just how much money they will LOSE by using this service. Sure the rate is the same, but other lenders/consolidators will give you MUCH HIGHER discounts for borrowing from them. Why worry about $300, when with the same rate AND interest rebates, you could save tens of thousands of dollars with someone like www.northstar.org.
SHEESH PEOPLE! THE $300 has to come from somewhere, and it's not from the government.
Some politicians such as New York State Attorney General Cuomo or Senator Kennedy say that student loan borrowers need “assistance” in navigating the student loan marketplace. My question to you is; what is there to navigate? If someone needs a federal student loan they fill out the forms from financial aid and apply. The rates are the same across the board depending on the “type” of loan they are applying for whether it is a Stafford, Perkins or whatever. These rates are set by the federal govt. It does not matter where they get the loan; the terms and rates are the same.
If someone wishes to consolidate their federal student loans the same still holds true. The rates are still calculated according to the Dept. of Education and the weighted average. The interest rates on the loans to be consolidated are what they are based on the federal government, not the lender. There are no costs to a federal student loan borrower to consolidate and the consolidation is a federal right given to them. This is all explained in the exit interviews that all graduates go through.
Do you feel that federal student loan borrowers are not capable of making their own decisions regarding their finances? I hope that you believe they can. Maybe you feel that the colleges and universities that this country has in place do not give an adequate education in giving them the ability to make good choices. I do not believe that a simple marketing program hurts anyone as student loan borrowers are just as smart as anyone else.
It is the private loan lenders and consolidators that need to be monitored. Those loans have crazy interest rates, higher then some credit cards! They have credit checks that can hurt a borrower, they have fees to consolidate and depending on the credit of an applicant it can be as much as 3 percent of the total loan balance that they are consolidating. To me and thousands of others that is what should be given the “assistance” in navigating.
On Thursday, September 27th, 2007, President Bush signed H.R. 2669: Higher Education Access Act of 2007, into law. This has all but put most student loan lending and marketing companies out of business and has severely hurt the ones that still remain. They (the government) claim this will make college more “accessible” to low income families by increasing the Pell Grant. This makes no sense as the increase is going to compete with the rising costs of tuition. Plus when does a Pell Grant make or break a student’s college education?! Text books are almost as much as a Pell. Another key point to this is this H.R. 2669 ended up taking away approximately 23 billion dollars in subsidies to lenders assisting with FFELP loans. These subsidies helped lenders give interest rate reductions to borrowers; it was these reductions which did the most good by saving a student loan borrower thousands of dollars off the repayment of their loan. Now lenders cannot offer interest rate reductions because they cannot afford to do so. Borrowers can no longer get their loans consolidated except through the federal governments Direct Loan Program. Talk about a monopoly. The devastation that the college cost reduction act has caused is bigger than anyone thought it would be. Just look at Sallie Mae the biggest lender in the country and the list goes on and on all the way down to the marketing companies that were doing good things.
Those companies were helping federal student loan borrowers with consolidations, deferment and forbearance questions and assisting them with paperwork to help with payments. If these companies misrepresented anything then consolidations were reversed, and more importantly were “cut off” from receiving the marketing fees for business they conducted. Lenders do not want to have bad consolidation loans and many lenders if not all have stringent requirements in order to offer consolidation loans. This was done for the borrower’s protection as well as the lenders.
Again it is the “private loan companies” that need attention; not the federal student loan lenders and marketers. But with the fall of the FFELP program 65percent of students in 2008-2009 will be taking a private student loan. So again I ask; who is hurting who? I believe the answer is clear.
Dear Anonymous,
How much were you paid to post that comment? Seriously, I'd like to know if the former FFELPC has you in their employ.
Certainly people are capable of making their own decisions, and certainly the interest rates are the same, but what benefits, other than a measely, one-time, $300 gift card, does the FFELPC (or whatever new moniker you've chosen) provide its clients? Nothing. Sure, they get consolidation benefits, but you offer nothing in the way of interest rebates, direct deposit discounts, etc.
Your offer is a piece of shit.
And if you're going to post on my blog, as a paid employee of a company like the FFELPC, then have the courage to identify yourself.
Hell yeah! Way to go Mac!
And for the record, that Anonymous comment came from this:
Host Name thejoyfm-pr.fab-bb.com
IP Address 64.58.201.254
Country United States
Region Florida
City -
ISP Citicom Online Communication Services Inc
Returning Visits 0
Visit Length 16 mins 51 secs
I'd venture that IP corresponds with the FFELPC, though I can't prove it.
I actually got another one of these from the original company that I got the first one from. So I had to do a new blog post comparing and contrasting the letters received 18 months apart. Check it out.
I received the letter with the Visa giftcard inviting me to use their services for consolidation, and once I gave the testimony, they'd activate my card. I needed to consolidate, so I checked it out. I did end up using their associated company to consolidate my loans--the terms were the same as they were with the other lenders I had checked out, and did offer the same "perks" like direct-withdrawl deductions and on-time payment deductions. Once the consolidation was done, I didn't hear anything about my gift card. So, I started poking around online, and found these Blogs. I called the company, and demanded to know when my card would be activated as promised. The lady was slightly rude, and said that the contract isn't complete upon consolidation; it is complete upon my submission of my testimonial to their services. I asked how I do that, and she said that the form should have been emailed to me for completion. I told her I didn't get any email, and don't remember giving my email address. She said they only do it by email, so I had to give my address. She had me give it to her again, and said "my CFO is out for the day, but I'll get him this message and see if he will regenerate the email". Amazingly, I had an email within 15 minutes wanting a testimony from me. I completed it, and then replied to the email with the BBB report about their agency. they responded that all companies have a few customers that are unhappy, even if they have millions of happy customers. They said they would activate my card within 7 days. I responded that I wanted a cashier's check. They responded that I would have a cashiers check in the mail within 7-10 days. On Monday, 4 days later, I had a cashier's check from their company in my hand. I called the bank that issued it (Fifth third Bank in Cincinnati, OH), and they confirmed it was from an active account and it was a good check.
Mac is a piece of shit low life who can't even make it as a teacher or anything else for that matter. What he is good at is peddling his uneducated thoughts on good things. Hey Mac I live in Florida and I worked for a student loan processing company. Guess what We made more money then you will ever hope to see in your stupid little life. Best of all we did it by helping people. You are really a disappointment to America and I bet your family as well.
Take care scum bag. By the way I've seen a picture of you you are overweight and I'd be willing to bet you smell too.
Anonymous,
9-0.187-72.tampabay.res.rr.com
IP Address 72.187.0.9
Country United States
Region Florida
City Palm Harbor
ISP Road Runner Holdco Llc
Wow, an internet tough guy. Your attack on me is baseless, though you are right, I do smell, of sex, frequently.
So, you "worked" for a company but "we" made more money blah blah blah. Dude, I didn't go into teaching for the money. I was at Georgia Tech, I would've graduated in 1999; if it had been about money, I would not've gone into teaching.
And for the record, you dolt, I only care about FFELPC; they operated in shades of gray, I, and many many others, called them on it, and they have reformed their practices, probably mostly because of people like me calling their practices to the attention of authorities with the teeth to do something about it.
Drink plenty of fluids, it'll help you feel better. See you in six months when the vitriol is more than you can bear. People like you are why we need government oversight of industry.
Mac is a piece of shit? Who the hell are you buddy? Just because Mac tells the public about possible scams and what might be going on is no reason to blast him. Maybe he does not have it completely accurate but I'm glad he cares enough to make a post about it. If he helped save someone from making a mistake then he did his job.
Of course if he talked completely out of his ass then that's another thing.
Mac keep up the good work. Are there any other good articles that you have on hand? I think you kick ass!
I did a Google search on the phone number 1-866-901-7729 after I read an add they posted on Craigslist.org http://puertorico.en.craigslist.org/ths/1037441201.html
It is really amazing the scams people are running.
Always Always Always do a google search on unknown telephone numbers!!!!
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