FTC wins restraining order against group it alleges portrayed itself as affiliated with the Department of Education before charging borrowers for services it misrepresented.
The Federal Trade Commission has blocked the operations of a group of companies allegedly portraying themselves as being affiliated with the U.S. Department of Education, charging that they promoted student loan debt-relief services but did not follow through as promised.
Arete Financial Group and related companies violated the Telemarketing Sales Rule and FTC Act, the FTC said in a complaint filed under seal Nov. 4 in the U.S. District Court for the Central District of California. A temporary restraining order was granted, halting operations falsely promising student loan debt relief, the FTC said in a news release Tuesday. The order temporarily prohibits certain business activities, including misrepresenting facts about loan services, freezes the defendants’ assets and appoints a temporary receiver authorized to take control of the defendant companies.
Those actions and “other equitable relief [are] in the public interest,” said an order signed by U.S. District Judge James V. Selna.