The U.S. Federal Trade Commission alleges Arete Financial Group and its affiliates promised student loan debt relief to trick students into paying up to $1,800 in upfront payments and monthly fees illegally. . (AP Photo/Seth Wenig, File)
Federal regulators are making payments totaling $3.3 million to defrauded students from Orange County businesses claiming to relieve student loan debt.
The Federal Trade Commission alleges Arete Financial Group and its affiliates feigned ties to the U.S. Department of Education to trick more than 37,800 students into illegally paying up to $1,800 in upfront payments and monthly tuition thereafter. there is
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The agency said it used radio, television, online advertising and telemarketing calls promising student loan forgiveness, debt consolidation and repayment programs.
“In practice, the fraudsters embezzled customer payments and never provided any of the promised remedies,” the FTC said.
Representatives for Arete Financial and its affiliates were not available for comment on Wednesday.
In 2019, the FTC obtained a temporary injunction to suspend the operations of Arete Financial, Arete Financial Freedom, CBC Conglomerate LLC, Diamond Choice Inc., among others. Businesses remained open in Santa Ana, Huntington Beach, Irvine, and Walnut Creek. The online post also includes Tustin’s name.
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The following year, a settlement was reached in the United States District Court for the Central District of California, in which defendants Carrie G. Howe, Anna C. Howe, Shun-Ming Su, Rudy Palacios, and Oliver Pomaji filed at least 83 million dollars to settle the FTC’s allegations. agreed to pay $5,000.
The order prohibited defendants from providing student loan debt relief services and from violating telemarketing sales rules. The judgment also included a monetary judgment of $43.3 million, but most of the judgment was stayed due to the defendant’s inability to pay.
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Investigators say the fraud has been ongoing since at least April 2014. The total settlement amount increased from $835,000 to $3.3 million, officials said.
The FTC said students who received the payment must cash the check within 90 days.
Department spokeswoman Nicole Drayton said companies are barred from offering student loan debt relief but can continue to offer unsecured credit card debt relief.
A similar incident occurred in May, when federal regulators suspended a student debt relief program in which three Orange County companies allegedly defrauded students of more than $12 million.
The complaint, filed by the Federal Trade Commission on April 24 in federal district court in Santa Ana, targets SL Finance LLC, BCO Consulting Services Inc, and SLA Consulting Services Inc, alleging that the companies have filed non-existent repayment programs and loans. alleging that he made false claims about the exemption.
The lawsuit was filed under legal protections such as the Federal Trade Commission Act, the Telemarketing Act, and the Consumer Fraud and Abuse Act.
Students who believe they have been defrauded by a company should call 855-678-0558 or FTC website.
