FTC Says Credit Repair Company Scammed Consumers Out of $213 Million

The Federal Trade Commission has taken action against Financial Education Services and its owners, Parimal Naik, Michael Toloff, Christopher Toloff and Gerald Thompson, as well as a number of related companies, for scamming consumers out of more than $213 million.

Financial Education Services, which also does business as United Wealth Services, offers credit repair services that are a scam. The company also recruits people to sell the same bogus services to others.

The FTC’s complaint alleges that the company preys on consumers with low credit scores by luring them in with the false promise of an easy fix and then recruiting them to join a pyramid scheme selling the same worthless credit repair services to others.

FES claims its services can boost people’s credit scores ‘by hundreds of points quickly’, but the FTC says the services accomplish little or nothing, and that FES charges people $99 upfront and $89 per month.

For example, FES sends clients form letters to send to credit bureaus to dispute negative items, but the letters don’t include supporting documents so they rarely result in removal of the items, the FTC says.

According to the complaint, FES pressures people into becoming its agents, but its business model requires them to pay hundreds of dollars to join and advance, and it incentivizes recruiting new agents over selling credit repair services.

For more on this story please consider this source:

FTC says credit repair business doubled as pyramid scheme – FTC News