Tag: ftc

Federal Trade Commission vs. Mortgage Relief Companies

Federal Trade Commission sues mortgage relief companies

The Federal Trade Commission recently filed three separate lawsuits against mortgage relief companies – Prime Legal Plans/Reaching U Network, American Mortgage Consulting Group, and Expense Management America.  According to the FTC’s allegations, these companies were fraudulently selling mortgage relief services.  The companies charged homeowners for various services that were supposed to reduce mortgage payments or otherwise relieve them of mortgage obligations.  In reality, the companies accepted payment without providing services.  Additionally, the companies violated other laws by, among other things, calling homeowners that were on the do-not-call registry, fraudulently claiming to be associated with government agencies, fraudulently claiming to be attorneys, collecting upfront fees, and claiming to be charities.

It is bad enough that these companies were charging distressed homeowners without providing services.  What’s worse is that, by convincing homeowners that their services would be effective, these companies prevented homeowners from pursuing legitimate services and defenses.

According to a recent press release, the FTC has filed more than 40 cases against fraudulent mortgage relief services since 2008.  This suggests that such practices might be quite common.  Homeowners should always be on guard against potential scams, and should gather as much information as possible about mortgage relief or other debt defense companies before making payments.

The Attorneys at Vaughn, Weber & Prakope, PLLC have experience in Loan Modification Negotiation and Foreclosure Defense.  If you have any questions about these areas and would like to schedule a free consultation, call our office at 516-858-2620 today to schedule a free consultation.

News: No Upfront Fees For Debt Relief Companies

On August 6, 2010, in Message/News Board, by Robbie L. Vaughn, Esq.

Federal Trade Commission (FTC)  issues rule prohibiting debt relief companies from collecting advance fees.

“Starting on October 27, 2010, for-profit companies that sell debt relief services over the telephone may no longer charge a fee before they settle or reduce a customer’s credit card or other unsecured debt.

Advance Fee Ban

The Final Rule contains specific requirements for debt relief providers related to charging an advance fee before providing any services. It specifies that fees for debt relief services may not be collected until:

  • the debt relief service successfully renegotiates, settles, reduces, or otherwise changes the terms of at least one of the consumer’s debts;
  • there is a written settlement agreement, debt management plan, or other agreement between the consumer and the creditor, and the consumer has agreed to it; and
  • the consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider.

To ensure that debt relief providers do not front-load their fees if a consumer has enrolled multiple debts in one debt relief program, the Final Rule specifies how debt relief providers can collect their fee for each settled debt. First, the provider’s fee for a single debt must be in proportion to the total fee that would be charged if all of the debts had been settled. Alternatively, if the provider bases its fee on the percentage of what the consumer saves as result of using its services, the percentage charged must be the same for each of the consumer’s debts.”

Click this link to read the entire FTC press release

WhiteHouse by PageLines

Copyright © 2021 Law Firm of Vaughn, Weber and Prakope, PLLC
All Rights Reserved