The Federal Trade Commission has settled with the last of a
group of Utah-based individuals and entities who claimed to be legal experts in
loan modifications and who promoted a home loan modification scheme which
allegedly conned consumers into paying hefty fees for worthless mortgage relief
services.
The settlement with Linden Financial Group resolves the
charges by the FTC that the companies and individuals lured consumers into
paying $500 to $3,900 by falsely promising that attorneys would negotiate loan
modifications to substantially reduce the consumers’ mortgage payments. Under
the settlement, the marketers will be banned from the mortgage relief and debt
relief industries. The final order for monetary relief and permanent injunction
ends the litigation in the matter of FTCv. Philip Danielson, LLC.
Linden settlement.
Linden Financial Group also is prohibited from violating the FTC’s
Telemarketing Sales Rule and is required to have competent and reliable
evidence to support claims made about the benefits, performance, or efficacy of
any financial product or service.
Linden was formed to serve as the marketing arm for the
enterprise, according to the FTC. Linden prepared and mailed ads for mortgage
relief services that were designed to look like they were coming from lawyers
in the recipients’ states. Additionally, The FTC also allegedthat the group received money from a payment processor set up to collect funds
from consumers and then used this money to fund expenses and funnel cash to
Philip Danielson and others.
The $28 million judgment reflects the total amount of fees
taken in by the scheme.
Complaint details.
The FTC filed its complaint
in June 2014 as part of a multi-agency federal and state law enforcement sweep
dubbed “Operation Mis-Modification” that targeted similar operations that
fraudulently pitched loan modifications. According to the FTC, the group touted
a success rate that exceeded 90 percent and enticed consumers to pay advance
fees by falsely promising that attorneys would negotiate loan modifications with
substantially reduced mortgage payments using their special relationships with
lenders or mortgage analysis reports produced by a proprietary software
program.
The defendants also urged homeowners to stop paying their
lenders and falsely promised full refunds if they did not obtain a loan
modification. However, the group allegedly provided little, if any, meaningful
assistance to modify or prevent foreclosure, and in numerous instances,
consumers suffered significant economic injury, including the loss of their
homes and property.
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