FTC Settles With Mortgage Lead Generator on False Advertising Charges

An online mortgage lead generator will pay $225,000 to settle false advertising charges that it deceived customers by marketing adjustable rate loans as fixed interest rate mortgages, the Federal Trade Commission announced. 

The FTC charged, a Houston, Texas-based lead generator, with advertising low interest-rate loans as fixed-rate loans when they were actually adjustable-rate mortgages, in violation of the Federal Trade Commission Act, the Mortgage Acts and Practices Advertising Rule, and Regulation N.

The company also allegedly failed to include important disclosures including annual percentage rates, downpayment amounts, and repayment terms that figured into the advertised payment amounts and interest rates. 

“Buying a home is one of the most important financial decisions a consumer can make,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “When companies deceive consumers about the true cost of the mortgages they offer, and consumers take on a mortgage they can’t afford, the harm can last a long time. The FTC’s message is clear: Mortgage advertising must be truthful.”

Ads on’s lead generating websites would proclaim low Federal Housing Administration fixed interest rates, free quotes, and no hidden costs. Consumers would then be directed to fill out a form in order to access information on the lowest rates available. 

The lead generator also violated the Truth in Lending Act and Regulation Z by advertising false credit terms, failing to disclose the annual percentage rate and whether it will increase after the loan is made, advertising variable-rate mortgages as fixed-rate mortgages, and stating a payment amount without making required disclosures. 

In addition to the $225,000 civil penalty, GoLoansOnline is prohibited from misrepresenting the terms and conditions of any financial product or service and any term or condition of a mortgage credit product or assisting others to misrepresent any material fact about a mortgage credit product.

The company is also barred from disclosing, selling, or transferring consumer data.

Written by Alyssa Gerace

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