The Federal Trade Commission (FTC) is sending more than $10.9 million to consumers harmed by a fraudulent credit repair operation.
The scheme had multiple names, the agency said in a March 17 news release, operating under the Financial Education Services, United Wealth Education, United Credit Education Services and Youth Financial Literacy Foundation.
Michigan-based Financial Education Services was accused of preying on consumers with low credit scores by luring them in with the false promise of an easy fix to their credit score, the agency said, citing a 2022 lawsuit. Consumers were then recruited to join a pyramid scheme that sold credit repair services to others, costing them millions.
According to a news release published in 2022, the company allegedly scammed more than $213 million from consumers. The scheme had been operating since at least 2015, the release states.
What Was the Scheme?
According to the FTC, the company claimed it could help consumers remove negative information from their credit reports and increase credit scores by hundreds of points. In turn, the company reportedly charged as much as $89 per month for its services.
The techniques, the agency said, were rarely effective and often harmed consumers’ credit scores.
“These defendants collected millions in junk fees as part of a pyramid scheme that peddled phony credit repair products,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in 2022. “We are pleased that the court shut down this operation and froze its assets, and we will continue to pursue firms that prey on families’ economic pain.”
In 2024, the agency settled with the company’s owners, Michael Toloff and Parimal Naik, as well as its operators, and required them to end the scheme and turn funds over to injured consumers.
How to Get Your Money
To help remedy the issue, the agency is sending checks to 443,048 affected customers. It’s unclear how much money each consumer should expect. The agency is advising recipients to cash their checks within 90 days, according to the March 17 release.
Consumers who have questions about their payment should contact the refund administrator, Analytics, at 833-699-7995 or by email at [email protected] or visit the FTC website to view frequently asked questions about the refund process.
This article originally appeared on USA TODAY: FTC sending $10.9M in checks to credit repair scheme victims
Reporting by Michelle Del Rey, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
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