WASHINGTON (6/2/14)--The Federal Trade Commission will pay out almost $3 million to more than 6,300 consumers who fell victim to a mortgage relief scam.
Starting in mid-2010, entities called Prime Legal Plans and Reaching U Network marketed mortgage relief services in English and Spanish. They contacted consumers who were in debt and told them they would have attorneys review consumers' mortgage loan documents to see if they were in compliance with the law, telling consumers that "80% of mortgages contain some fraud."
The entities told consumers the findings would help them negotiate lower mortgage rates, but instead charged up to $750 a month while doing nothing to help consumers stave off foreclosure.
On company websites, these entities claimed to be a private charity working for consumers, and would regularly cold call consumers, even ones on the Do Not Call list. The FTC has charged that these entities violated the Telemarketing Sales Rule, the FTC Act and the Mortgage Assistance Relief Services Rule.
"Consumers should carefully evaluate offers of help in lowering their mortgage payments or saving their homes from foreclosure," reads a statement released by the FTC. "Consumers should also know that it is illegal for anyone to collect money up-front for loan modification or foreclosure rescue services."
The FTC's Mortgage Relief Scams website lists many of the common ways fraud can be perpetrated on homeowners, including:
The FTC, through an administrator, will mail checks that must be cashed by July 21. The amount consumers will receive varies depending on how much they lost. Consumers who have questions should call 1-877-291-8511 or visit the FTC refunds website.
The FTC reminds consumers that it never requires consumers to pay money or provide information before redress checks can be cashed.
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