In its first enforcement action for violations of the Mortgage Acts and Practices Advertising Rule, the FTC announced it imposed a $7.5 million civil penalty against a mortgage broker for violations of the Do Not Call provisions of the Telemarketing Sales Rule and the MAP Rule. The MAP Rule prohibits unfair or deceptive acts or practices regarding mortgage loans, loan modifications and foreclosure rescue services. The complaint alleges that, in violation of the TSR and the MAP Rule, the mortgage broker: (1) called more than 5.4 million numbers on the National Do Not Call Registry to offer home loan refinancing services to current servicemembers and veterans; (2) falsely offered low interest, fixed rate mortgages at no cost, when in fact the mortgage broker only offered adjustable rate mortgages that required consumers to pay closing costs and (3) misled consumers about its affiliation with the Department of Veteran Affairs.
The settlement is the result of a coordinated effort with the CFPB, which also shares enforcement authority of the MAP Rule. In November 2012, the two agencies issued warning letters and initiated formal investigations of mortgage lenders and brokers concerning potentially misleading mortgage advertisements in violation of the MAP Rule and TSR (see November 27, 2012 Alert). Under the terms of the settlement, the mortgage broker is prohibited from denying future consumer requests to be placed on Do Not Call lists, calling consumers on the National Do Not Call Registry, misrepresenting any terms related to mortgage credit products and misrepresenting its affiliation with any government entity or organization.