A United State district court has shut down two related operations who apparently failed to provide promised debt relief services and jeopardized clients’ privacy by at the Federal Trade Commission (FTC)’s request. Apparently one firm charged consumers a $1,495 up front fee for a mortgage relief assistance program that was never given as well as tossing personal information into unsecured dumpsters putting clients’ personal information in serious jeopardy.
The FTC has been cracking down on scams lately that target consumers in financial distress. Goodness knows there’s enough of them out there! The settlements with Relief Foundation, Silver Lining Services, Mitigation America, and their principal owners are a result of the recent crackdowns. The defendants, James Holderness, Bryan Melanson, Michael Valenti, and Jillian Melanson, are banned from working in the mortgage assistance and debt relief business from the settlements. Also, a judgement of more than $10.5 million has been issued. This amount is the total the defendants made through their deceptive conduct. Mitigation America’s Dennis Strzegowski has also been banned for working in just the debt relief industry.
According to the FTC, the Residential Relief defendants used a logo similar to the Great Seal of the United States to market their products. Claiming quick results and a high success rate, the defendants charged a $1,495 up-front fee, advised consumers to stop making mortgage payments, and falsely claimed that reports they created would enable homeowners get the promised results.
The FTC alleged the defendants behind Residential Relief Foundation violated federal law by falsely claiming their loan modification program could lead to the waiver of late mortgage payments, late fees, and legal fees; the conversion of adjustable mortgage rates to fixed rates as low as one percent; the reduction of consumers’ principal balance; and up to 40 percent lower mortgage payments.
The defendants engaged in their conduct amid the publicity surrounding the availability of free mortgage loan assistance and modification programs, including the Home Affordable Modification Program (HAMP) implemented by the federal government under the Troubled Asset Relief Program (TARP).
Finally, the FTC charged that in marketing credit card debt relief services, the defendants falsely told people they could become debt-free in 12 to 36 months, could eliminate late fees and penalties, and could reduce their debts by up to 50 percent.
Defendants cannot make misrepresentation about any product or service under these settlements, including claims about financial products and/or services, their affiliation with the government and implementation of their data security measures. The defendants are also required to have competent and reliable evidence to back up key claims about their financial products or services and prohibit them from violating the FTC’s Telemarketing Sales Rule. Also, in settlements, the total judgment amounts will become due if the defendants are found to have misrepresented their financial condition – Source.