WASHINGTON (7/23/14)--The Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC) and 15 states have announced sweeping actions against foreclosure relief scammers that they say used deception to prey on struggling homeowners who were facing foreclosures.
In an announcement Wednesday, the CFPB said it was filing lawsuits against three such companies that collected "more than $25 million in illegal advance fees for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages." The FTC said it was filing six other lawsuits. And, a joint release said, the states are taking 32 actions.
"We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure," said CFPB Director Richard Cordray. "These companies pocketed illegal fees--taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began. These practices are not only illegal, they are reprehensible."
The CFPB is seeking compensation for victims, civil fines and injunctions against the scammers.
In conjunction with its announcement of legal action, the CFPB also released an advisory to help consumers recognize the red flags of foreclosure relief scams, especially when someone is claiming to provide legal help.
Use the resource links to access the advisory and to read more on the agencies' and states' actions.