Credit Repair Pyramid Scheme Financial Education Services Shut Down After Bilking Consumers of Over $213 Million
A worthless service promotes easy credit fixes and a credit repair pyramid scheme where very few have an opportunity to make money.
Why Financial Education Services have been fined $1 million???
$1 million fine was imposed on Financial Education Services for credit repair pyramid fraud.
Federal Trade Commission shuts down the credit repair pyramid scheme, which built more than $213 million from consumers.
Credit Repair Pyramid Scheme got restricted for ???
Federal Trade Commission takes action against financial education services for:
For scamming consumers out of more than $213 million turned on $30 million
Lowing them with fake easy fixes
Recruiting them in to join a credit repair pyramid scheme to sell the same worthless credit repair services
These defendants collected millions in junk fees as part of the permits game to peddle phony credit repair products.
How the credit repair pyramid scheme exposed?
According to the FTC complaint, Michigan-based financial education services, also doing business as United wealth services, has operated its scheme since at least 2015.
Seven years on, they’ve been prosecuted. Thus, just because something’s been running for a while doesn’t make it legal. That’s what you got to be aware of now. Deceived consumers about credit repair sold in effective rent payment products, charged consumers upfront for credit repair, and operated a pyramid scheme. Therefore, they tried to get around the legalities of pyramid schemes by putting these products in place. But obviously, it didn’t work.
Credit Repair Pyramid Schemes break the rules
The FTC’s complaint alleges that the company’s practices violate the FTC Act, the Credit Repair Organizations Act, and the Telemarketing Sales Rule. Specifically, the agency alleges that the defendants:
False Promises: Financial Education Services deceives consumers by using social media, telemarketing, false testimonials, and a network of sales agents. Using false promises, they claim to remove negative information from credit repair reports.
Inauthentic Information: It also sells an additional product that was supposed to send the rent payment information to credit bureaus. But the complaint notes that this information is not generally part of consumers’ credit scores. Also that many credit bureaus do not accept this kind of information directly from consumers.
Illegal consumer charges: Consumers were charged upfront for credit repair services, which is illegal. Consumers are charged $99 upfront and then recurring monthly fees of up to $89 for ineffective services, according to the complaint. Furthermore, the company fails to provide important information to consumers, like refund and cancellation policies.
Consumers losing money as agents:The company ran a pyramid scheme where consumers could become Financial Education Services agents themselves. Selling the company’s services to other consumers. Agents claim that consumers can make over $1,000 weekly and earn bonuses of tens of thousands of dollars. Consumers are also accused of paying hundreds of dollars for the company’s bogus credit repair services each month. Even though they don’t need them. Its compensation structure resembles a pyramid scheme, with increasing levels of compensation and titles based on how many members you recruit. Consumers don’t always make their promised income, and agents lose money too.
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