The Federal Trade Commission is releasing payments of more than $3.3 million to students affected by a loan debt relief scam.
The Commission said that under a fake operation, Arete Financial Group tricked consumers into making illegal upfront payments by pretending to be affiliated with the U.S. Department of Education and falsely promising student loan debt relief.
The Santa Ana, California-based management consultancy and investment advisory firm was alleged to have collected customers' payments and never delivered on the promise.
The FTC said it is sending checks to more than 37,800 consumers who were affected by the scam.
In November 2019, the federal consumer protection agency had alleged that Arete Financial and its affiliated companies used multiple promotion campaigns promising to enroll consumers in student loan forgiveness, consolidation, and repayment programs.
However, Arete Financial regularly failed to reduce or eliminate consumers' loan balances or monthly payments, according to FTC.
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