Arete Financial Freedom was targeted by the Federal Trade Commission (FTC), a consumer watchdog agency, because of alleged abuses in their student loan assistance services.
The court-appointed Receiver was attempting to sell off the settlement side of their business and the Arete position was apparently that they knew they blew it with their student loan assistance business model but everything was cool with the settlement side.
Some people have expressed a concern that the settlement side was using personal loan mailer offers to drive people into a settlement sale. If you or one of your clients have received such a mailer, please send it to me here.
As an example of what I’ve been hearing is this comment, “These people ALL came to them seeking a “Consolidation Loan” from the marketing pieces they got every week from Arete but then they were all told, “You do not qualify” which is BS as they never offered them a loan. Then they put them into a DS program not even clearly explaining ANYTHING to the clients about their effect on credit, the fact creditors are not going to get paid monthly or several different key items.”
The issue with the personal loan mailers is if the mailer is used as a bait and switch tool and the vast majority of people are then sold a DS program. I’ve written about these sorts of things before from other companies.
Arete wanted their settle business back so they could begin sales and servicing again. They won a partial victory and the court has ruled they can at least service their old clients only. I wonder what will happen when a current client wants to add new accounts. From the court order, it seems the answer to that should be nope.
According to the new order, Arete can make the following changes:
“Arete and the Arete Defendants shall not modify content on these websites except to state the following on the website www.aretefinancial.org: “We apologize to any current debt settlement customers of Arete who may have had trouble reaching us during the temporary suspension of our debt settlement operations. We have now resumed servicing our existing debt settlement clients and are available at the number listed below.” The Arete Individuals are unsure of the availability of Arete’s prior phone number and therefore may modify the website to reflect any phone number subsequently assigned or available. To the extent that further modification may be necessary to clarify questions consumers may have, the Arete Defendants will meet and confer with the FTC regarding any proposed changes. If the parties cannot agree on any proposed modifications, the Arete Defendants shall seek Court permission prior to modifying these websites.”
“Immediately upon resuming operations involving the contacting or servicing of Current Customers, Arete shall send all Current Customers, in the form of an email, a notification containing the following:
RE: A Message from Arete
Dear Valued Customer,
As you may be aware, Arete’s operations were suspended temporarily due to a lawsuit filed by the Federal Trade Commission unrelated to their debt settlement operations. The Court has now authorized Arete to resume our debt settlement operations and the servicing of your accounts. However, please note the following important information:
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Our phone number has changed to (xxx) xxx-xxxx. If you have any questions, please call us during our regular business hours, Monday to Friday, 8AM5PM PT. Our customer service representatives will be standing by to update you on the status of your accounts and existing settlements.
We will continue to seek to ensure that existing settlements are being paid to your creditors through your custodial account with Debt Pay Gateway. Arete will also continue to collect fees on accounts we settle only after we settle the accounts, and an initial payment has been made to your creditor(s) under that settlement.
In addition, under your customer agreement with Arete, you always reserve the right to terminate your agreement with us with 3-days’ written notice, for any reason, and to have any funds in your custodial account returned to you.
We apologize for any inconvenience the suspension of our business activities may have caused you but we remain committed to work hard to service your debt settlement needs and strive to alleviate your debt burdens.
If you have any questions, please feel free to contact us.”
“This Order is intended to remain in effect only for the duration of this action pending a final adjudication on the merits or other order of this Court. Nothing in this Order shall be construed to limit the type or scope of any other relief or final relief that the Court may enter at the conclusion of this action.”