Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Mortgage refinancer to pay $7.5 million for do not call violations, (Jun 27, 2013)

By William Zale, J.D.

Mortgage Investors Corp. of Ohio, one of the nation’s leading refinancers of veterans’ home loans, has agreed to pay a $7.5 million civil penalty, the largest fine the FTC has ever collected for allegedly violating Do Not Call provisions of the agency’s Telemarketing Sales Rule (TSR) (U.S. v. Mortgage Investors Corp. of Ohio, Inc., Case No. 8:13 cv 1647, FTC File No. 1022 3084, June 27, 2013).

This case also represents the first action brought by the FTC to enforce the Mortgage Acts and Practices—Advertising Rule (MAP Rule), which allows the FTC to collect civil penalties for deceptive mortgage ads.

According to the complaint, Mortgage Investors’ telemarketers called more than 5.4 million numbers listed on the National Do Not Call Registry to offer home loan refinancing services to current and former U.S. military consumers in violation of the TSR Rule. The telemarketers also allegedly led service members to believe that low interest, fixed rate mortgages were available at no cost, often quoting rates that they implied would last the duration of their loan. In reality, Mortgage Investors only offered adjustable rate mortgages in which consumers’ payments would increase with rising interest rates and would require consumers to pay closing costs. In addition, Mortgage Investors allegedly misled consumers about their affiliation with the Department of Veterans Affairs (VA). The FTC charged Mortgage Investors with false and misleading acts or practices in violation of Section 5 of the FTC Act and the MAP Rule.

Under the settlement, the defendant is barred from denying consumers’ future requests to be placed on entity specific Do Not Call lists; calling consumers on the National Do Not Call Registry; misrepresenting any terms related to mortgage credit products including rates, closing costs, fees, interest, and savings; and misrepresenting its affiliation with any government entity or organization including the VA.

The Commission vote to authorize staff to refer the complaint to the Department of Justice, and to approve the proposed consent decree, was 4-0.

Companies: Mortgage Investors Corp. of Ohio, Inc.

News: ConsumerProtection FederalTradeCommissionNews