The Federal Trade Commission is sending more than $3.3 million to student loan borrowers who were tricked into making illegal upfront payments to a company that “pretended to be affiliated with the U.S. Department of Education and falsely promised student loan debt relief.”
The checks are being sent to more than 37,800 consumers who dealt with Arete Financial Group, the FTC said last week in a news release.
In November 2019, the FTC alleged Arete and several related companies pretended to be affiliated with the U.S. Department of Education and used radio, television, online ads and telemarketing calls to promise to enroll consumers in student loan forgiveness, consolidation and repayment programs, the agency said in the news release.
Arete told consumers that in exchange for consumers paying upfront and monthly fees, the company would reduce or eliminate consumers’ student loan balances, the FTC said.
Despite getting the money from consumers, “Arete Financial regularly failed to reduce or eliminate consumers’ loan balances or monthly payments,” the agency said.
The FTC obtained a temporary restraining order in 2019 that halted operations at Arete Financial, Arete Financial Freedom, CBC Conglomerate LLC and Diamond Choice Inc., among others, SiliconValley.com reported.
A settlement was reached in 2020 in U.S. District Court for the Central District of California. The defendants agreed to pay at least $835,000 to settle the FTC allegations.
The FTC has already begun to send out the checks to the borrowers who were customers of Arete. The agency is telling consumers who are getting the checks to cash them within 90 days.
Consumers who have questions about their payment should contact the refund administrator, JND Legal Administration, at 855-678-0558; or visit the FTC website to view frequently asked questions about the refund process.
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