2,600 student-loan borrowers are getting $11 million in payments after a federal consumer watchdog accused a debt relief company of illegally charging fees — and encouraging customers to 'stop paying their student loans altogether'

• The CFPB accused debt relief company GST Factoring, and four attorneys, of illegally collecting fees from consumers.

• In a complaint, the agency said the defendants illegally charged fees and encouraged borrowers "to stop paying their student loans altogether."

• 2,600 impacted borrowers will be receiving a collective $11 million in payments in the mail.

A federal consumer watchdog just cracked down on a student-debt relief company over predatory behavior.

On Thursday, the Consumer Financial Protection Bureau (CFPB) announced that 2,600 student-loan borrowers who were charged "illegal upfront fees for student-loan debt-relief services" by GST Factoring, which runs a debt relief business, will receive checks in the mail totaling a collective $11 million.

In 2020, according to the press release, the CFPB filed a complaint against GST Factoring, along with four attorneys who provided debt relief services within the company. The CFPB claimed that the company and the attorneys were responsible for charging about $11.8 million in illegal fees to borrowers with private student debt, even as the Telemarketing Sales Rule states it is illegal to request and receive fees for debt relief services through telemarketing before the debt is settled.