Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Marketer agrees to $28.6M judgment, debt relief industry ban, (Apr 3, 2015)

By Greg Hammond, J.D.

Linden Financial Group LLC has reached a settlement with the FTC, imposing a $28.6 million monetary judgment, as well as a ban from the mortgage and debt relief industries. Linden settled claims that it violated the FTC Act by deceptively promoting a loan modification scam that allegedly bilked consumers out of millions of dollars for worthless mortgage relief services (FTC v. Philip Danielson, LLC, File No. 132 3240, Case No. 2:14-cv-00896-GMN-VCF).

The FTC originally filed its complaint against Linden and other entities in July 2014, as part of a multi-agency federal and state law enforcement sweep named “Operation Mis-Modification.” The sweep targeted operations that fraudulently pitched loan modifications to consumers.

According to the complaint, the defendants touted a success rate exceeding 90 percent and enticed consumers to pay advance fees ranging from $500 to $3,900 by falsely promising that attorneys would negotiate loan modification with substantially reduced mortgage payments using their special relationships with lenders or mortgage analysis reports produced by a proprietary software program. The defendants also allegedly urged homeowners to stop paying their lenders and falsely promised full refunds if they did not obtain a loan modification. However, the defendants purportedly provided little, if any, meaningful assistance to modify or prevent foreclosure, the FTC charged. In numerous instances, consumers suffered significant economic injury, including the loss of their homes and property.

The settlement agreement requires Linden to transfer all funds in certain bank accounts to the Commission, which will be put towards a $28.6 million judgment in favor of the FTC. In addition, Linden is banned from: (1) advertising or selling secured or unsecured debt relief products or services; (2) making misrepresentations concerning financial products and services; (3) making misrepresentations concerning other products and services; (4) representing the benefits, performance, or efficacy of any financial related product or service; and (5) engaging in abusive telemarketing services.

Settlements were previously reached with other corporate defendants in February 2015. However, the settlement with Linden ends the FTC’s litigation of this matter.

Companies: Linden Financial Group LLC

News: Advertising ConsumerProtection FederalTradeCommissionNews