FTC to Refund $1.2 Million to Victims of Deceptive Mortgage Scheme

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WASHINGTON, D.C. — The Federal Trade Commission (FTC) has announced it will be returning over $1.2 million to victims of a deceptive mortgage modification scheme orchestrated by Consumer Defense.

The FTC is set to distribute payments to 6,261 affected consumers, each receiving an amount of $201.34. These individuals fell prey to a scheme that promised to prevent foreclosure and make their mortgages more affordable but instead left them financially distressed.

The checks should be cashed within 90 days, according to the FTC. For consumers with questions or concerns about their refunds, the commission has appointed JND Legal Administration as the refund administrator. Consumers can contact JND directly or visit the FTC’s website for answers to frequently asked questions. The FTC has emphasized that it never requires people to pay money or provide account information to receive a refund.

This refund initiative comes in response to a 2018 complaint lodged by the FTC against Consumer Defense, which operated under several names including Preferred Law and American Home Loan Counselors. The company was accused of deceiving homeowners, typically charging unlawful upfront fees in monthly installments of $650 under the guise of providing expert legal assistance to make mortgages more manageable.

Many unsuspecting homeowners paid these hefty fees, only to discover that not only had their loans not been modified as promised, but in some cases, the defendants had not even contacted the lenders. As a result, many consumers found themselves out of pocket by hundreds or thousands of dollars, with no relief from their mortgage difficulties.

The FTC’s move to return funds to the victims of this scheme is a significant step in addressing the fallout from such deceptive practices. It serves as a reminder of the potential dangers lurking in the financial services sector, particularly for consumers navigating complex issues like mortgage modifications.

The importance of this issue extends beyond the individual homeowners affected. Schemes like these not only undermine consumer confidence in financial services but also can have broader implications for the housing market and overall economy. By taking action to address these practices, the FTC is sending a clear message about the importance of transparency and integrity in financial services.

This case is a stark reminder to all consumers to remain vigilant when engaging with financial service providers. It’s crucial to thoroughly research companies, understand the terms of any agreement, and report any suspicious activity to authorities. In an era where financial scams are becoming increasingly sophisticated, such caution is more important than ever.

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