The U.S. Federal Trade Commission (FTC) is disbursing more than $1.2 million in refunds to borrowers who lost money to Consumer Defense, a fraudulent mortgage modification scheme.
The FTC is sending payments to 6,261 consumers who will each receive $201.34. The agency asked that the recipients should cash their checks within 90 days upon receipt.
According to the FTC’s 2018 complaint, Consumer Defense operated under a number of names, including Preferred Law and American Home Loan Counselors, and falsely promised homeowners it would prevent foreclosure and make their mortgages more affordable. The defendants typically charged homeowners unlawful upfront fees in monthly installments of $650, falsely promising expert legal assistance. In many instances, consumers paid hundreds or thousands of dollars only to learn that the defendants had not obtained the promised loan modifications, and in some cases had never even contacted the lenders.
A federal court ruled in favor of the FTC in 2019, but the case dragged on through the appeals process until a district court entered a monetary judgment under Section 19 of the FTC Act last year for the defendants’ violations of the Mortgage Assistance Relief Services Rule.
Photo courtesy of Alpha Photo / Flickr Creative Commons
