In July, the bureau, which has taken enforcement actions against a number of debt settlement companies, issued a specific warning about companies that claim to help with student loan debt.
In Illinois, where the companies blanketed airwaves with the advertisements, the sheer volume of pitches alarmed the attorney general.
"Once you see posters, something is wrong," Ms. Madigan said.
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The companies, Ms. Madigan said, aggressively courted teachers, police officers, firefighters and nurses — groups that in lean economic times are particularly vulnerable.
The advertising extended to the services First American offered, including something called the Obama Forgiveness Program that was supposedly recently approved by Congress. The Education Department does not offer such a program.
According to the complaint, First American, which is based in Chicago, even pretended to be affiliated with the department and pressed borrowers to make upfront payments by phone, a violation of state law that prohibits debt settlement companies from doing so.
The so-called Obama Forgiveness Program enticed Rick Cibelli, a 48-year-old caregiver from Peoria, Ill., to call First American last year. He had borrowed $10,000 to earn his paralegal certificate and had trouble affording the $60 monthly payments, which covered only the interest on what he owed.
He paid $175 by phone to the company, which said it had ties to the Education Department.
"I was suspicious," Mr. Cibelli said. He called the department and learned that no such affiliation existed. "I immediately called my bank and had them give the charge back."
— By Rachel Abrams and Jessica Silver-Greenberg, The New York Times