JPMorgan Sues Frank for Fraud
The FTC cautioned student assistance portal Frank about how it could unlawfully misrepresent consumers regarding student pandemic relief only one year before JP Morgan Chase bought it with $175 million. This is the 2nd time Charlie Javice and Frank have been accused of fraud in misrepresentation before JPMorgan’s takeover.In the previous month, JPMorgan alleged in a lawsuit that the company had created millions of false clients, raising serious concerns about the company’s operations.
According to Insider, Frank also settled with the authorities over allegations that the company misrepresented its connections to the Education Department. Frank became a rising star in the student loan industry at the time, offering to dramatically simplify the procedure of filing for funding.
The FTC investigation was prompted by an essay published in July 2020 by Wesley Whistle, who charged Frank with gathering student information to market to 3rd parties without providing student aid. According to Whistle, Frank misrepresented to students the amount of financial help from the 2020 CARES Act, giving approximately 7 billion dollars for urgent grants to students owing to the pandemic outbreak and how easily it could be acquired.
The website includes potentially deceptive representations, such as that filing for an urgent grant with identical qualifying criteria for all institutions was effortless. In addition, Frank marketed $5,000 advances to kids who wanted critical funds. The advance would not have to be repaid until “your relief arrives,” according to the company’s website.
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