Scam Alert: Yrefy "Investment" Promissory Notes

I was the scammer hunter long before I was the M&A hunter. Old habits die hard. So when a slick CNBC commercial started pitching 10.25% fixed returns on student loan paper, I had to pull the thread.

What They're Selling

Reg D 506(c) promissory notes. $50,000 minimum. 1-5 year terms. They buy defaulted private student loans at 35-40 cents on the dollar, refinance the borrowers at 1%-5.99%, charge a 5% origination fee, and promise you 6.5% to 10.25% fixed annual returns.

How The Math Supposedly Works

This is the part the CNBC ad doesn't explain. Yrefy buys a $20,000 defaulted loan for ~$8,000. They refinance the borrower into a brand new loan for the full $25,000+ (original principal plus accrued interest and fees), collect a 5% origination fee ($1,250), and stretch the term out to 20 years. They may require a co-signer.

So the return to investors isn't really coming from the interest rate. It's coming from the spread between what Yrefy paid for the loan and what the borrower now owes. The model works on paper, as long as borrowers who already defaulted once keep paying for 20 years.

That's a big "as long as."

The Public Record

$750,000 Massachusetts enforcement settlement. State securities action (Docket No. E-2024-0334) for violations related to celebrity endorsers selling the product. Consent order entered February 2025. Not a paperwork issue. A regulator said you broke the rules.

Source: sec.state.ma.us/divisio…

Barry Minkow flagged them. Convicted fraudster turned fraud investigator. Detailed piece in February 2026 calling out contradictions between Yrefy's ads and their financials. When a guy who ran one of the biggest fraud schemes in history says your product doesn't add up, listen.

Source: barryminkow.substack.co…

Not FDIC insured. Not SIPC protected. Unsecured promissory notes. Yrefy goes under, your $50K is gone.

SEC has NOT reviewed the offering. Reg D 506(c) is a private placement exemption, not an endorsement.

What They Won't Show You

This is what matters most. NAQF (National Association of Qualified Filers) published a deep breakdown in February 2026 and identified the exact data points any serious investor would need before writing a check. Yrefy does not provide any of the following:

• Delinquency and default ratios by loan origination cohort

• Modification and forbearance usage rates

• Default curve projections as the portfolio matures

• Average credit scores at origination by loan size

• Settlement policies on re-defaulted Yrefy loans

• Process flow showing when Yrefy purchases the loan vs when they contact the borrower

Yrefy claims a 2-3% default rate on the entire portfolio. But as NAQF points out, the portfolio may be too new or growing too fast for that number to mean anything. A rapidly growing loan book will always show a low default rate early because defaults take time to materialize. The number that matters is cohort-level re-default data over time. They don't publish it.

Source:

The Borrower Side Is Rough Too

The CNBC ad frames this as helping struggling students. Here's what "help" looks like. You defaulted on a $20,000 loan. Yrefy bought it for $8,000. They now refinance you for the full $25,000+ at up to 5.99% over 20 years with a 5% origination fee. You may need a co-signer who is now fully obligated to your debt.

You're not saving money. You're paying full price on a loan someone bought for 40 cents on the dollar. The benefit is resetting your credit history. That has real value for some people. But "save thousands with your refinance" as Yrefy claims on their website is misleading at best when the total repayment over 20 years likely exceeds what you originally owed.

Bottom Line

$750K state enforcement settlement. Unsecured notes with no insurance. Locked liquidity. A business model that depends on previously defaulted borrowers paying for 20 years. No cohort-level performance data. Misleading borrower claims on their website.

Maybe it's not a Ponzi scheme. Maybe the model works. But they haven't shown the data to prove it, and the public record gives you every reason to demand it before writing a $50,000 check based on a TV commercial.

Stay sharp out there.