Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Mortgage modification operators barred from selling credit products by FTC, (Dec 15, 2015)
Organizations Mentioned:Bureau of Consumer Protection
By Edward L. Puzzo, J.D.
The FTC has banned individuals associated with a deceptive mortgage modification business from marketing or selling any debt-relief products or services (FTC v. Lake, FTC File No. 112 3136).
Previously, in its April 14, 2015 complaint, the FTC had charged certain individuals associated with the purported mortgage relief businesses HOPE Services and HAMP Services—Brian Pacios, Chad Caldaronello, Justin Moreira, Derek Nelson and Cortney Gonsalves—with stealing mortgage payments from consumers facing home foreclosures, by falsely promising that they would obtain mortgage modifications for the homeowners. Their actions led in some cases to consumer foreclosures and bankruptcy.
Today, the FTC announced the November 3, 2015 and December 4, 2015 entry of stipulated court orders that (1) impose a judgment of $2.7 million against Pacios, Caldaronello and Moreira; (2) impose a judgment of approximately $860,000 against Nelson; (3) impose a judgment of approximately $219,000 against Gonsalves; (4) prohibit Pacios, Caldaronello, and Nelson from misrepresenting any product or service, profiting from customers’ personal information, and failing to properly dispose of it; (5) ban Pacios, Caldaronello, and Moreira from telemarketing; (6) ban Pacios and Caldaronello from selling credit-related financial products and services or using aliases; and (7) prohibit Moreira and Nelson from using material misrepresentations and unsubstantiated claims to sell financial products and services.
In announcing the entry of the stipulated orders, Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, stated: “These rip-off artists took struggling homeowners’ last dollars, but we’ve shut down their destructive and illegal schemes. Now, in addition to financial judgments, the court has permanently banned them from the industries and practices they exploited.”
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