Attorney General Kwame Raoul today announced victims of the fraudulent credentials bootcamp student lender Prehired LLC will finally start receiving long-delayed relief payments from a more than $30 million settlement Raoul announced in 2023.
As a result of advocacy by Raoul and a coalition of states, the Consumer Financial Protection Bureau is disbursing $4.2 million in restitution to 660 borrowers nationwide who used Prehired’s predatory loans to cover the costs of enrollment in the company’s tech sales program in Illinois and other states.
“Prehired deceived student borrowers with false promises of lucrative employment and pursued them with aggressive collection tactics when they could not repay these illegal loans,” Raoul said. “I am pleased that victims will finally be receiving the financial relief they deserve, and I will continue working to hold bad actors accountable to borrowers.”
Prehired was a company which offered a 12-week program promising to prepare students with entry-level software sales credentials, with a “job guarantee” by the end of the course. In 2022, watchdog groups alleged to federal regulators that Prehired was engaging in a broad range of illegal activities relating to deceptive loan agreements and collection.
Subsequently, Raoul, with the CFPB and several states filed a lawsuit against Prehired in 2023, alleging the company used deceptive marketing tactics to lure Illinois residents into paying up to $30,000 for its unlicensed online sales training program. Prehired, they determined, deceived borrowers by claiming its unlawful income-share loans were not loans and hid important loan terms from borrowers; including the amount financed, finance charges and the loans’ annual percentage rate.
The resultant court order voided the $27 million in fraudulent loans claimed by the company and two affiliated entities, and ordered restitution in a sum of $4.2 million to the group’s victims. In addition, the settlement permanently banned Prehired from offering income-share loans in the future or any activities related to vocational education.
While the court order was placed in late November 2023, the CFPB finally announced the allocation of the restitution payments half a year later in May 2024. Throughout 2024, states received regular updates regarding the federal government’s progress on distributing funds to Prehired’s victims.
Then the CFPB ceased providing information about the process starting in February of this year. The CFPB, being one of many agencies to be caught up in the freeze of federal operations by the new Republican administration, ceased all enforcement action for an extended period. In that time, the Student Borrower Protection Center reported in April, the individuals responsible for the Prehired scheme resumed operations under the company name “FastTrack.”
“The similarities between Prehired and FastTrack do not end with the concept and description,” writes the SBPC in its report on the new company. “In fact, it appears that FastTrack’s structure, promises, and the vast majority of the content on FastTrack’s website are copied and pasted verbatim from its previous iteration as Prehired.”
Attorney General Kwame Raoul, as part of a coalition including state attorneys general, issued a letter May 6, pressing the CFPB’s acting director for details related to relief payments. The letter reminded acting CFPB Director Russell Vought of the details of the 2023 court order against Prehired, and demanded explanations for continued delays that kept the CFPB from distributing those checks.
Weeks after the letter’s delivery, the CFPB has announced disbursements would proceed.
At present, despite the continuation of activity at the Consumer Financial Protection Bureau, FastTrack’s webpage remains operational.
