FTC accuses Arete Financial Group of fraud of falsely promising loan forgiveness.
37,800 Student-loan Borrowers are Expecting to Receive Checks but were Scammed
According to the news published by Yahoo! News, $3.3 million in student loan borrowers defrauded by the Arete Financial Group, FTC accuses. It will send mail payments to 37,800 debtors whom it claims were wronged by the corporation. The FTC emphasized that the group offered debt assistance but instead pocketed consumer funds. A top consumer advocate has now fined yet another company for allegedly defrauding student loan borrowers out of millions of dollars.
The Federal Trade Commission revealed this week that it is distributing compensation a total of more than $3.3 million to 37,800 student-loan borrowers who made a payment to debt-relief company Arete Financial Group. According to the FTC press release, Arete Financial appeared to be linked with the Education Department and “falsely” promised debt relief to borrowers, but instead the payments made by the customers, were pocketed and unauthorizedly used their identities.
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Arete Financial Group’s Commitment
Defendants assured consumers that in return for the payment of initial charges and subsequent monthly fees, they would reduce or remove consumers’ student loan balances, according to the complaint. the FTC stated. Arete Financial, on the other hand, frequently failed to lower or eliminate consumers’ loan balances or monthly payments.
The FTC first raised these claims in 2019, accusing Arete and many other companies of defrauding borrowers and nagging illegal upfront payments in the name of student loan forgiveness. Borrowers who believed will shortly get a check in the mail from the refund administrator JND Legal Administration, which works with the FTC to simplify refund operations. Arete Financial Group has no answers for comment right away.
This is not the first that frauds are occurring. In recent years, the FTC has issued refunds to borrowers following a variety of different scams. For example, in May, the monitoring group announced that it had stopped two “student loan debt relief schemes” that it claimed cheated borrowers out of about $12 million by making fake documents as proof of claim about the relief that did not exist. The FTC issued checks to another 23,000 customers in December after five companies have been accused of fraudulently acquiring debt relief expenses and exaggerating interest rates.
Regardless of the result, of the Supreme Court’s ruling of giving $20,000 to student-loan borrowers, payments will resume in October, with interest beginning to accumulate again in September after a three-year hiatus. The Education Department recently warned the public that the resumption of classes could be an opportunity for fraud to work. Before two conservative-backed lawsuits halted the implementation of Biden’s debt relief, the White House and Education Department issued an information sheet on avoiding loan forgiveness frauds in October.
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