According to a Federal Trade Commission (FTC) press release:
“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.
In response to a complaint filed by the FTC, a federal court has temporarily shut down the sprawling bogus credit repair scheme. 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.
“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. “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.”
According to the FTC’s complaint, Michigan-based Financial Education Services, also doing business as United Wealth Services, has operated its scheme since at least 2015. The company claims to offer consumers the ability to remove negative information from credit reports and increase credit scores by hundreds of points, charging as much as $89 per month for their services. Their techniques, according to the complaint, are rarely effective and in many instances harm consumer’s credit scores.
The FTC’s investigation found that the company’s scheme combines charging consumers for these worthless credit repair services with a hard sell to join a pyramid scheme that consists of selling the worthless services to more consumers. The complaint alleges that the company’s practices violate the FTC Act, the Credit Repair Organizations Act, and the Telemarketing Sales Rule.”
To continue reading the full FTC press release, click here.