A top consumer watchdog just cracked down on yet another company it said scammed student-loan borrowers out of millions of dollars.
Last week, the Federal Trade Commission announced that it is sending checks totaling over $3.3 million to 37,800 student-loan borrowers who gave money to Arete Financial Group, a debt-relief company. According to the FTC's, Arete Financial pretended to be affiliated with the Education Department and"falsely" promised borrowers debt relief, but instead,"pocketed customers' payments and never provided the promised relief.
"Defendants promised consumers that in exchange for the payment of upfront fees and subsequent monthly fees, they would reduce or eliminate consumers' student loan balances," the FTC said."However, Arete Financial regularly failed to reduce or eliminate consumers' loan balances or monthly payments.", accusing Arete and several other companies of scamming borrowers and charging illegal upfront fees under the guise of student-loan forgiveness.
This is far from the only scam student-loan borrowers have fallen victim to. Over the past few years, the FTC has sent refunds to borrowers following a number of different scams — for example, in May, the watchdog announced it stopped two"student loan debt relief schemes" that it said
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