A scheme to bilk distressed homeowners out of $2K-$4K with false promises of legal help and lower mortgage payments has been taken to court by the FTC and put under a temporary restraining order. The service was marketed on both radio and television, as well as online and via telemarketing.
FTC said it “…filed suit in federal court to halt a mortgage relief scheme that allegedly deceived and preyed on distressed homeowners by charging them $2,000 to $4,000 based on bogus foreclosure rescue claims. The defendants allegedly falsely claimed they would provide legal help to save consumers’ homes from foreclosure and lower their mortgage payments, then charged them up-front fees in violation of federal law, delivering little or no help, and driving them deeper into debt.”
In addition to bringing the operations to a halt and initiating a court proceeding, assets have been frozen and provisions were made to appoint a receive pending the trial.
FTC said that three individuals: Ratan Baid, Madhulika Baid, and William D. Goodrich, and seven associated companies were targets of the action.
Many promises were made and few kept, according to the FTC, but the main problem is charging fees in advance. FTC said this is a violation of the Mortgage Assistance Relief Services Rule, “…which bans mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.”
RBR-TVBR observation: The old adage applies: If it sounds too good to be true, it probably is not true. While we have never seen the FTC go after a broadcaster for running false advertising – thankfully, broadcasters are not expected to police the advertising community – still, it is in the interests of broadcasters to protect their listeners from false advertising if at all possible.