The FTC has stepped in and sued some debt relief companies in an effort to get them to stop impersonating federal agencies.
This case is important since it targets the claims made by a debt relief agency and requires the claims made to be true.
The Federal Trade Commission has filed a complaint in U.S. District Court to halt the misleading claims of a defendant who allegedly deceived consumers by using multiple websites to impersonate federal consumer assistance agencies or pretend to be affiliated with them. Through the websites, the defendant solicited indebted consumers and referred them to companies selling mortgage, tax, and debt relief services with promises that their debts would be substantially reduced or eliminated, according to the FTC complaint.
As part of its continuing crackdown on scams that target consumers in financial distress, the FTC charged Christopher Mallett with multiple violations of the Federal Trade Commission Act for misrepresenting his affiliations with federal agencies, misrepresenting that the services advertised on his websites were government-approved, and making deceptive debt relief claims. The FTC further charged that his deceptive claims violated the FTC’s Telemarketing Sales Rule and Mortgage Assistance Relief Services Rule.
Mallett did business as Department of Consumer Services Protection Commission, U.S. Debt Care, World Law Debt, U.S. Mortgage Relief Counsel, gov-usdebtreform.net, worldlawdebt.org, usdebtcare.net, and FHA-homeloaninfo.
Readers of the site may recognize that I had previously called out Department of Consumer Services Protection Commission in my story, “Consumer Services Protection Commission. What a Load of Crap!.” After I published that article, the site tried to slam me by posting false information about me on it. Who’s laughing now?
The FTC alleged that Mallett, a San Antonio, Texas-based “lead generator,” impersonated the FTC or other government agencies on websites he created. For example, Mallett’s websites associated his business with a fictitious government agency – the “Department of Consumer Services Protection Commission” – that appears to combine two real government agencies, the Federal Trade Commission and the Consumer Financial Protection Bureau. To further this false message, the websites depicted the FTC’s official seal, copied language about the fictitious agency’s supposed consumer protection mission almost verbatim from the FTC’s site, and claimed that the fictitious agency “monitors and researches” member companies that provide financial assistance to American consumers, the complaint alleges.
According to the FTC, Mallett also deceived consumers by using the name of another fictitious government agency that he called the “U.S. Mortgage Relief Counsel” on his website, FHA-HomeLoan.info. This website also included a picture of the U.S. Capitol building and promised that the “Counsel” would direct consumers to “officials licensed with the National Mortgage Licensing Service (NMLS), persuant [sic] to the SAFE act of 2008.” According to the FTC, neither Mallett nor any of his websites have ever been affiliated with the FTC or any other government agencies.
Mallett also allegedly claimed that consumers who responded to his website solicitations could have their debts substantially reduced, in some cases citing specific percentages. In one instance, the website depicted a “success stats chart” for his business that purported to show that his customers’ debts were settled for 16 percent to 40 percent of the amount owed. These claims were false or unsubstantiated, the FTC charged.
The complaint filed by the FTC states Mallett “has solicited consumers who seek debt relief, tax relief, and mortgage assistance relief services through a number of Internet websites. Since at least August 19, 2008, Defendant has registered or operated numerous websites, including but not limited to the following: gov-usdebtreform.net, usdebtcare.net, worldlawdebt.org, fha-homeloan.info, us- stopforeclosurenow.com, usstopforeclosuretoday.com, usstopforeclosure.com, usbank- loanmodification-gov.info, mortgagehelp-gov.us, loanmods-gov.info, loanmods-gov.us, mortgagehelp-gov.info, debtconsolidation-gov.info, debtrelief-gov.info, creditcard-assistance-gov.info, and mycredithelp-gov.info.
The complaint also discredits the claims made about Mallet’s ability to perform debt restructuring as advertised.
The gov-usdebtreform.net website also has provided several links to other websites. The links have displayed text with representations including: “Your IRS Tax Debt Can Be Reduced To A Fraction Of What Is Owed And You Can Be Debt Free. Click Here For A Free Evaluation,” and “The Ultimate Debt Settlement Program. Our Debt Buyers purchase your Debt from Creditors at a settled price. Then, You [sic] pay the debt buyer in easy LOW and AFFORDABLE monthly payments. Minimum 5K debt.”
The FTC also took issue with the Defendant selling the World Law Legal Enrollment Package as well. And the success charts published in the furtherance of selling debt relief services are alleged to be false, misleading, deceptive, and unsupported.
The complaint also charges these companies and Mallet with violating the FTC Telemarketing Sales Rule.
Since at least February 11, 2011, in connection with the telemarketing of debt relief services, Defendant has misrepresented, directly or indirectly, expressly or by implication, that the websites or organizations he has operated are affiliated with, or endorsed or sponsored by, the United States government.
Since at least February 11, 2011, in connection with the telemarketing of debt relief services, Defendant has misrepresented, directly or indirectly, expressly or by implication, material aspects of the debt relief services, including the amount of money or the percentage of the debt amount that a customer will save by using Defendant’s services.
The Federal Trade Commission also states the enterprise violated the Mortgage Assistance Relief Services Rule (“MARS) in the selling of mortgage modification related services.
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