Section 702 - Prohibitions A student debt consultant is prohibited from doing the following:
(a) performing student debt consulting services without a legal written, fully-executed contract with a borrower that comports with the provisions of this article;(b) charging for or accepting any payment for student debt consulting services before the full completion of all such services, including a payment to be placed in escrow or any other account pending the completion of such services;(c) taking a power of attorney from a borrower;(d) retaining any original loan document or other original document related to a borrower's student loan;(e) requesting that a borrower provide his or her FSA ID to the consultant, or accepting a borrower's FSA ID;(f) stating or implying that a borrower will not be able to obtain relief on their own;(g) misrepresenting, expressly or by implication, that:(1) the consultant is a part of, affiliated with, or endorsed or sponsored by the government, government loan programs, the United States department of education, or borrowers' student loan servicers; or(2) some or all of a borrower's payments to the consultant will be applied towards the borrower's student loans.(h) inducing or attempting to induce a student debtor to enter a contract that does not fully comply with the provisions of this article; or(i) engaging in any unfair, deceptive, or abusive act or practice.N.Y. Financial Services Law § 702
Added by New York Laws 2020, ch. 58,Sec. MM-1, eff. 9/30/2020.