A Student I Canceled 2 Years Ago For Non-payment Just Emailed Demanding A $5,550 Refund. The Company Behind It All Is Now Being Sued By The Ftc. How Would You Handle This?

Location: Georgia

A student I canceled 2 years ago for non-payment just emailed demanding a $5,550 refund. The company behind it all is now being sued by the FTC. How would you handle this?

Looking for advice from anyone who's dealt with something like this.

Background: I run an education business. In 2023, I paid a company called Air AI / Scale 13 in the five figures to get access to their mentorship program and their financing platform called Midas. I want to be clear about this up front — I was never a partner of theirs. I was a paying customer. I was a victim of their scam myself, which is a big part of why this whole situation became such a mess.

The way the setup worked: me on one side as the education provider, a third-party lender on the other side putting up the money, and Air AI / Scale 13 sitting in the middle running the whole operation through Midas. All sales flowed through their platform. They brokered the loans, they pushed students through credit approvals, they ran the dashboard where I tracked everything, and they were the ones paying me out on a monthly basis as the student made their payments to the lender.

It turned into a nightmare. The Midas dashboard went down at one point and I lost access to all my student and payment records. I barely got paid on students who defaulted because I only got paid when the student paid. Scale 13 stopped answering my emails entirely. I ate a significant loss on revenue I'm still trying to reconstruct to this day.

Then in August 2025, the FTC filed a federal lawsuit against Air AI / Scale 13. The complaint alleges they bilked consumers out of around $19 million, made false earnings claims, refused to honor refund guarantees, and used their Midas platform to broker deceptive loans at APRs up to 24.99%. It's public record. The founders are named defendants in federal court right now.

So I'm sitting here as someone who paid them five figures to get in, got burned on the merchant side, and is now watching the feds confirm what I already suspected: these guys were running something shady and I was collateral damage right alongside the students.

Here's the current issue.

A student from November 2023 just emailed me out of nowhere, two years later. He's claiming his membership was canceled within the first month of joining, that no refund was ever sent to the lender, and that the unpaid loan has wrecked his personal credit. He wants me to refund $5,550 "immediately."

The problem with his story is that I have receipts.

I have the full email thread from January 2024 between me and my Scale 13 point of contact. What actually happened: the student stopped making payments in his first month. He then DM'd me on Instagram saying, word for word, "Imma get out of that mess. They some scam artists I ain't paying that insane interest." Translation: he signed the contract, agreed to the loan terms, then decided the APR was too high and announced he was bailing on payments.

The lender contacted Scale 13 trying to cancel his account based on his claims. I pushed back on the refund framing because I could see clearly what was happening. He had just agreed to the loan terms weeks earlier, then tried to bail the moment his first payment came due because he decided the interest was "too high." If I had agreed to refund him at that point, I'd be helping him fraudulently escape a contract he willingly signed. That's not a legitimate refund situation, that's buyer's remorse being weaponized to get out of a loan.

When he continued to not pay, I did cancel his access to the course material. I have employees I have to pay regardless of whether he's paying me or not. You can't keep using my services if I'm not getting paid — that's basic. That's standard for any membership platform when someone stops paying.

I only ever got paid a fraction of what he owed because, again, payouts only came through when he actually paid the lender, and he barely paid at all before defaulting. He paid probably at most $200 to $500 total, if that, before going silent.

Two years go by. Radio silence from him the entire time. And now he surfaces demanding $5,550 back, claiming a version of events that directly contradicts what I have in writing.

My gut read: he's either (a) just seen the FTC lawsuit news and is retracing every party in the chain hoping someone pays him to go away, (b) his credit just took a hit from the lender reporting the default and he's panicking, or (c) he's shotgunning emails at everyone involved hoping one of us folds first.

What I'm stuck on is the reply. Do I:

1. Not respond at all and wait to see if he escalates?
2. Get ahead of it and consult a business attorney before any response goes out?

For context: the amount ($5,550) is well under small claims limits in my state. No attorney is going to take this on contingency. And the company that actually ran the financing side of this is currently getting federally sued for this exact type of behavior.

What would you do? Anyone here dealt with a customer resurfacing years later over a financing dispute when the company running the operation turned out to be the actual bad actor?

NOTE: He defaulted on the payments WELL before any FTC lawsuit or anything arose his reasoning wasn’t anything relevant towards this. He just did not want to pay interest to a company (the lender)