On September 3, 2015, the Federal Trade Commission (“FTC”) agreed to settle allegations with a mortgage relief services company that allegedly charged homeowners an illegal fee for assistance the company never provided. The FTC brought its claims under section 5(a) of the Federal Trade Commission Act (“FTCA”), 15 U.S.C. § 45(a), the Mortgage Assistance Relief Services Rule (“MARS Rule”), 16 C.F.R. § 322, and Regulation O, 12 C.F.R. § 1015. The complaint alleged that the company and its owner represented that they could lower borrowers’ mortgage payments and interest rates, or obtain loan modification and restructuring of the borrowers’ mortgages. The company then collected fees for these services prior to receiving a written offer from the borrowers’ lender or servicer.
The stipulated order, filed in the United States District Court for the Central District of California, bans the company and its owner from selling debt relief services, making misrepresentations about any products or services, and selling or benefiting from their customers’ personal information. The order also includes a $885,677 judgment, which equals the total amount of fees charged by the company. The order was entered by the court on August 21, 2015.