At the Federal Trade Commission’s request, a U.S. district court has shut down two related operations as a result of settlements with defendants who allegedly failed to provide promised debt relief services and jeopardized their clients’ privacy by tossing their personal information into unsecured dumpsters. In addition, one of the operations allegedly charged consumers a $1,495 up-front fee based on phony promises that they would get mortgage relief assistance.
The settlements with Residential Relief Foundation, LLC; Silver Lining Services, LLC; Mitigation America, LLC; and their principal owners are part of the FTC’s ongoing crackdown on scams that target consumers in financial distress. The settlements ban the defendants from working in the mortgage assistance and debt relief business, prohibit them from the alleged privacy violations, and impose judgments totaling more than $11 million – the amount of consumer harm they caused.
In its November 2010 complaint, the FTC alleged the defendants behind Residential Relief Foundation violated federal law by falsely claiming their loan modification program could lead to the waiver of late mortgage payments, late fees, and legal fees; the conversion of adjustable mortgage rates to fixed rates as low as one percent; the reduction of consumers’ principal balance; and up to 40 percent lower mortgage payments.
According to the FTC, the Residential Relief defendants used a logo similar to the Great Seal of the United States to market their products. Claiming quick results and a high success rate, the defendants charged a $1,495 up-front fee, advised consumers to stop making mortgage payments, and falsely claimed that reports they created would enable homeowners get the promised results.
To view the full Federal Trade Commission article, click here.