Business ProfileforFinancial Education Services

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.

On May 24, 2022, the U.S. District Court for the Eastern District of Michigan issued a Temporary Restraining Order in response to a Complaint filed by the Federal Trade Commission on May 23, 2022.

The FTC’s complaint alleges the defendants- Financial Education Services, also doing business as United Wealth Services, VR-Tech LLC, VR-Tech Mgt LLC, CM Rent Inc (a Colorado Corporation), Youth Financial Literacy Foundation (a Michigan nonprofit), and owners Parimal Naik, Michael & Christopher Toloff, and Gerald Thompson (in their individual and corporate capacities)- violated the FTC Act, the Credit Repair Organizations Act, and the Telemarketing Sales Rule.

Specifically, the FTC alleges that the defendants:

• Operated an unlawful credit repair scheme through websites, social media, telemarketing, bogus testimonials, and a network of sales agents using false claims that they can improve credit scores by removing negative items from credit reports
• Collected prohibited advance fees from consumers for their credit repair services
• Failed to provide disclosures required by law, including refund and cancellation policies
• Marketed an investment opportunity that encouraged consumers to become Financial Education Services “agents” and then recruit other consumers to purchase Defendants’ credit repair services. Defendants falsely claim that FES agents will earn substantial income. Defendants’ purported investment opportunity is an illegal pyramid scheme with a compensation plan that incentivizes recruiting new agents over selling credit repair services, and few ever realize the promised earnings

The Temporary Order prohibits the Defendant’s from:

• Certain credit repair activities, such as misrepresenting that any person can remove negative information or hard inquiries from any other person’s credit report or credit history, or charging for the performance of any credit repair service before such service is fully performed
• Certain marketing program activities, such as engaging in any marketing program that pays compensation for recruiting new members, or encourages members to purchase goods or services to obtain bonuses, rewards, or commissions
• Releasing or benefitting from customer information, such as selling, renting, or otherwise disclosing personal financial or identifying information obtained in connection with activity outlined in the Order

In addition, the Order freezes Defendant’s assets, appoints a temporary receiver*, and requires each Defendant to deliver certain financial disclosures and accounting to FTC counsel and the Receiver within 5 days of service of the Order.

*A court appoints a receiver to secure and manage the assets of defendants in a court case

The FTC press release included these resources for consumers: 877-382-4357 and reportfraud.ftc.gov. Additional information: FTC Complaint, and Temporary Restraining Order