Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC actions lead to temporary halt of deceptive debt relief operations, (Feb 24, 2016)

By Michael Menzhuber, J.D., LL.M.

At the request of the FTC, a federal court has temporarily halted a debt operation charged with falsely representing to financially distressed homeowners and student loan borrowers that it would help to get their mortgages and student loans modified, the FTC announced today. The FTC seeks to permanently stop the alleged illegal practices and obtain refunds for affected customers (FTC v. Good EBusiness, LLC., CV16-1048, February 16, 2016).

According to the FTC’s complaint, Good EBusiness LLC (d/b/a The AAP Firm) and Tobias West deceptively marketed home loan modification services and illegally charged advance fees between $1,000 and $5,000. The complaint alleges that they: (1) falsely claimed that they could lower consumers’ monthly mortgage payments and reduce their mortgage interest rates, usually within a few months; (2) falsely promised full refunds if they failed; and (3) told consumers to stop making mortgage payments and communicating with their lenders during the purported loan modification process, without providing disclosures required by the Mortgage Assistance Relief Services Rule (MARS Rule) and Regulation O.

The FTC complaint also alleges that Good EBusiness LLC (d/b/a Student Loan Help Direct; Select Student Loan; Select Student Loan Help LLC; Select Documentation Preparation, Inc.), Tobias West, and Kormal West illegally charged advance fees of $500 to $800 for purported student loan services. The complaint states that they falsely told financially distressed borrowers that they would: (1) renegotiate, settle, or alter payment terms on their student loan debt; (2) remove tax liens and wage garnishments; and (3) provide a full refund of fees if they failed.

Good EBusiness LLC and Tobias West were charged with violating the FTC Act and the MARS Rule/Regulation O. All of the defendants were charged with violating the FTC Act and the Telemarketing Sales Rule.

A temporary restraining order was entered against the defendants on February 16 by the U.S. District Court for the Central District of California.

Companies: Good EBusiness LLC

News: ConsumerProtection FederalTradeCommissionNews