WASHINGTON—The Federal Trade Commission said it is sending payments totaling more than $3.3 million to consumers who were harmed by Arete Financial Group, a student loan debt relief operation that “tricked” consumers into making illegal upfront payments.
According to the FTC, the company pulled off the ruse by pretending to be affiliated with the U.S. Department of Education and falsely promising student loan debt relief. In reality, the scammers pocketed customers’ payments and never provided the promised relief, the FTC added.
The FTC is sending checks to more than 37,800 consumers.
In November 2019, the FTC alleged Arete Financial 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.
“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.”
NY AG’s Office In Settlement With Company
Separately, the New York Attorney General’s Office has recovered more than $1.7 million from COINEX for failing to register as a securities and commodities broker-dealer and for falsely representing itself as a crypto exchange.
The agreement resolves the AG’s lawsuit against CoinEx and requires the company to refund thousands of New York investors more than $1.1 million and pay more than $600,000 in penalties to the state.
As part of the consent order, CoinEx is banned from offering, selling, or purchasing securities and commodities in New York and is prohibited from making its platform available in the state. In response to the lawsuit, CoinEx publicly announced that it would withdraw its platform and services from the United States, the AG’s office stated.
CoinEx is a Hong Kong-based virtual currency trading platform that allows investors to buy and sell cryptocurrency through its website and mobile app. New York law requires securities and commodities brokers to register with the state, which CoinEx failed to do.
Investigator is Able to Open Account
According to the AG’s office, one of its investigators was able to create an account with CoinEx using a computer with a New York-based IP address to buy and sell digital tokens even though CoinEx was not registered with the state.
The agreement requires CoinEx to provide full refunds totaling $1,172,971.50 to 4,691 New York investors. In addition, CoinEx must implement geoblocking to prevent New York IP addresses from accessing their platform. CoinEx is also prohibited from creating any new accounts for U.S. customers and existing U.S. customers can only withdraw their crypto from the platform.
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