Allegations against Frank and Charlie Javice found in 2018 settlement

Allegations against Frank and Charlie Javice found in 2018 settlement

Allegations against Frank and Charlie Javice found in 2018 settlement

  • Visitors to Frank’s website may have been mistakenly under the impression that the company is affiliated with the federal government, the Department of Education said in 2017.
  • The department argued that Frank’s website “may mislead consumers.”
  • The parties reached a settlement in 2018 after the Department initiated trademark infringement proceedings.

Years before JP Morgan Chase accused Charlie Javice of fraudulently inventing customers for its student financial aid platform Frank, the 30-year-old fintech founder settled with the federal government over allegations that her company could mislead students . Billing documents obtained by Insider showed that Frank was forced to change the name of his website and disclose to consumers that it was not affiliated with the federal government.

The Department of Education in 2017 accused Frank of violating his trademark on the FAFSA, the Free Application for Federal Student Aid, a form completed by aspiring students and their families to determine eligibility for various scholarships and loans. The department said in a cease-and-desist letter that Frank may be misleading applicants searching for the official government FAFSA website.

Frank, however, had no official affiliation with the Department of Education and was not considered a designated “FAFSA preparer,” according to records reviewed by Insider. Frank settled in the Department of Education in 2018.

Javice and Frank came under scrutiny after the Wall Street Journal reported Tuesday that financial giant JP Morgan Chase, which acquired Frank in 2021, was suing Javice for inventing millions of fake customers to justify the bank’s $175 million takeover of the startup. .

In another lawsuit, filed in December in Delaware, Javice accused JP Morgan of undermining Frank’s values ​​”by pursuing ill-conceived business plans.” The bank fired her before it had to pay her $28 million in a takeover, according to Javice’s lawsuit.

Frank and her attorney, Alex Spiro, did not immediately respond to a request for comment. Spiro had previously denied JP Morgan’s allegations.

Even before graduating in 2013, Javice was hailed as a child prodigy by the financial sector, which wanted to change its image after the 2008 financial crisis. A focus on creating financial products for people traditionally overlooked by banks – poor people and students – earned her a spot on Forbes’ 2019 “30 Under 30” list. A Wharton business school video titled it “The Voice of a Microfinance Generation.”

In 2017, Frank’s website was called frankfafsa.com. Under the settlement, Frank sometimes referred to the form as “Frank’s FAFSA” on social media and elsewhere. In particular, the domain name “was confusingly similar” to the Department’s website, fafsa.gov, “and was therefore likely to mislead consumers,” according to the settlement.

Students and their families can complete the FAFSA form for free at fafsa.gov. Frank offered a free service, but also tried to sell customers more expensive packages. For example, for $500, students and their families could pay Frank to negotiate with schools on their behalf for more financial aid.

The settlement required Frank to declare that he was not affiliated with the Department of Education and move to the new website withfrank.org.

The insider obtained a settlement through college finance expert Mark Kantrowitz, who said concerns about how Frank characterized his business led him to file a public request for information about the company with the Department of Education in 2018.

In numerous interviews with the media, including Insider, Javice portrays himself as an entrepreneur who breaks the mold.

“I built a company and raised funds after college by turning down a job in finance, even though I was told I would fail because I had no business experience,” she told Insider in 2021. “My impatience to achieve my goals helped me walk away from this one.” conventional wisdom” to take the risks that got me to where I am today.”

Do you have a tip or insight you want to share? Contact reporter Katherine Long via phone or the Signal encrypted messaging app (+1-206-375-9280) or email (clong@insider.com).

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