FTC Cracks Down on Mortgage Rescue Scams
The Federal Trade Commission (FTC) announced six new lawsuits brought against companies accused of running foreclosure rescue and loan modification scams. The suits are the latest action federal and state authorities are taking in “Operation Stolen Hope,” which to date includes 118 actions by 26 federal and state agencies, including a total of 28 FTC lawsuits filed against alleged fraudulent firms. “These operators targeted consumers who were on the brink of financial disaster, and instead of holding them back, they pushed them over,” FTC chairman Jon Leibowitz said, adding consumers should be wary of counseling firms that charge a fee. The suits claim the companies charged large upfront fees to facilitate mortgage modifications to help borrowers reduce their monthly payments, but never followed through on their commitments. Some of the companies allegedly misrepresented themselves as being affiliated with government programs aimed at helping homeowners. The suits claim violations of the FTC Act, and in some instances, the Telemarketing Sales Rule (TSR) or the Credit Repair Organizations Act (CROA). The latest cases were filed in California, Florida and Ohio. Write to Austin Kilgore.