Student Financial Aid Services Inc. is accused in a complaint filed Thursday by the Consumer Financial Protection Bureau of charging families for help in filling out the Free Application for Federal Student Aid.

The company is charged with engaging in deceptive sales and billing practices, according to the complaint. The CFPB states that the company lured customers with misleading information about the cost of its services, then charged automatic, recurring annual fees.

Under the CFPB’s order, the company faces a $14.5 million for the alleged violations. Full payment will be suspended if the company meets certain obligations, including paying $5.2 million in refunds.

“Student Financial Aid Services Inc. made millions of dollars at the expense of consumers through its illegal recurring payment scheme,” said CFPB Director Richard Cordray. “Our enforcement action will put money back in the pockets of consumers who were misled while seeking to access federal student aid.”

The company, based in Sacramento, Calif., operates websites including and, and related call centers, where it offers fee-based assistance to consumers filling out the federal government’s Free Application for Federal Student Aid. The websites are not affiliated with the federal government’s FAFSA program.

FASFA is the U.S. Department of Education’s form to apply for financial aid, and it is also used by many states and colleges to determine students’ eligibility for aid. 

The official website,, is run by the government. But the similarly named was owned by Student Financial Aid Services from at least July 2011 until earlier this month, when the web domain was turned over to the Education Department.

According to the CFPB's complaint, when consumers entered payment information for certain financial advisory services, the company began to bill them for an annual subscription without the consumers’ knowledge or consent. These recurring charges typically ranged from $67 to $85 each year and were renewed annually. The company enrolled consumers in these annual subscriptions without adequate disclosures and imposed recurring fees without consumers’ authorization.

On its website, SFAS offered paid FAFSA preparation that included access to an experienced financial aid adviser who would answer questions about the financial aid process, according to the CFPB complaint. The company charged consumers up to $80 for online FAFSA preparation and as much as $100 for help over the phone.

The complaint alleges that the company violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibitions against unfair and deceptive acts and practices by misleading consumers about the recurring charges. 

The company also allegedly violated the Electronic Fund Transfer Act by failing to get appropriate authorization for future electronic withdrawals from consumer accounts and engaged in deceptive telemarketing practices in violation of the Telemarketing Sales Rule. 

Specifically, the CFPB alleges that Student Financial Aid Services, Inc.:

Misled consumers using deceptive sales tactics: According to the CFPB complaint, the company engaged in illegal sales tactics through its websites, and, and through its call center representatives. The company advertised certain service plans as an “upgrade” at “no additional cost.” In reality, consumers who signed up for those services were charged automatically each year, typically $67 to $85 per year.

Enrolled consumers in an unlawful recurring payments scheme: The CFPB alleges that Student Financial Aid Services, Inc. illegally enrolled customers in automatic recurring charges without their knowledge or consent. Thousands of consumers were victimized by these unlawful practices. The company also failed to explain the amounts and dates of those future charges, or how consumers could avoid those charges.

Charged consumers without their authorization: The CFPB alleges that the company made recurring charges to consumer accounts without obtaining the legally required consumer authorization and without providing a copy of that authorization to consumers, as required by law.

A copy of the complaint can be found at:

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